Submission on IFRS Foundation’s consultation paper on sustainability reporting

The trustees of the International Financial Reporting Standards Foundation (IFRS Foundation) have published a consultation paper to identify the demand from stakeholders in the area of sustainability reporting and to understand what role the IFRS Foundation could play in response to that demand.  

The IFRS Foundation is an organisation that was established to develop a single set of globally accepted accounting standards (IFRS Standards) and to promote and facilitate adoption of the standards.

The consultation paper poses a number of high level questions including:

• is there a need for a global set of internationally recognised sustainability reporting standards?
• if yes, should the IFRS Foundation play a role?
• is a new Sustainability Standards Board, within the IFRS Foundation, an appropriate approach?
• what are the views on requirements for success?

The paper puts forward three high-level options for how the IFRS Foundation could approach sustainability reporting:

• maintain the status quo
• facilitate existing initiatives
• create a Sustainability Standards Board (governed by the IFRS Foundation) and become a standard-setter working with existing initiatives and building upon their work. This option is considered the best of those discussed to assist in reducing complexity and achieving comparability in sustainability reporting.

The IoD welcomes the IFRS Foundation’s initiative to achieve further global consistency and reduce complexity in sustainability reporting. The IFRS Foundation is well placed to be a lead authority in this area. It will be important to work with existing frameworks and other initiatives to develop a global set of standards that will provide clarity, coherence, comparability and reduce competition between frameworks.