The Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC) are
due to complete their merger by mid-2021, forming the Value Reporting Foundation. The two entities merged with the goal of developing the global standard corporate reporting framework for sustainability performance.
The effort ties closely into the increasing importance of ESG metrics as a matter of concern to the wider investor community, including the largest institutional investors. The SEC, in
seeking public comments on the need for ESG disclosures, directly asked several questions about developing metrics or using existing frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), and the Climate Disclosure Standards Board (CDSB). Overall, the call for a more standardized reporting system on ESG has come from regulators, investors, and corporate leaders.
The merger represents an effort by SASB to give its reporting standards the best chance to come out on top and effectively become the FASB of sustainability performance. SASB will continue to set sustainability standards tailored to specific industries while the IIRC will continue to encourage integrated reporting standards on material information about company strategy, governance, performance, and prospects in a comparable format globally.
Several institutional investors have specifically asked for companies to use SASB frameworks, including Goldman Sachs and BlackRock. It is not clear whether the SEC is leaning towards creating its own list of disclosures, or if it will accept the use of a third-party disclosure system such as SASB.
