ESG Standards Convergence Could Happen in Next 12 to 24 Months
Reporting standards in the world of ESG investing, long a thicket of competing frameworks, could converge within 12 to 24 months, said Janine Guillot, head of the Sustainability Accounting Standards Board-
Standards and guidelines around sustainability reporting have bloomed, and companies have said that the reporting requirements are onerous. Investors, meanwhile, have said that without common standards they can’t compare companies adequately.
The efforts under way to develop a global reporting system include one backed by the SASB, another led by the International Financial Reporting Standards Foundation (IFRS), and then the World Economic Forum’s International Business Council, in concert with the Big Four, which unveiled its own set of universal sustainability metrics for reporting stakeholder capitalism. Companies are also reporting according to the guidelines of the Task Force on Climate-related Financial Disclosures, or TCFD.
SASB supports the IFRS initiative. Guillot said it “is the path to what I call global legitimacy for standards. In the same way that they [converged with] GAAP [generally accepted accounting principles], they can leverage the existing work and we can integrate the work of TCFD and SASB and that can happen relatively quickly.”