Sustainability Reporting
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Sustainability reporting refers to qualitative and quantitative disclosures by issuers about environmental, social, and governance topics beyond the disclosures in the financial statements.
Sustainability reporting standards, and sustainability assurance standards, are in a nascent stage, similar to the state of financial reporting and auditing standards in the early 20th century. Standard setters and regulators are defining their roles and building capacity, and it’s likely that geographic heterogeneity will continue. At the same time, investors are demanding high-quality, comparable sustainability information for investment and voting decision making, which issuers are providing under their own or third-party reporting frameworks.
CFA Institute brings a rich history of investor-focused advocacy for high-quality financial reports and independent audits to our global advocacy in sustainability reporting.
Over the last decade, we have supported the development of the Sustainability Accounting Standards Board (SASB) standards, the International Integrated Reporting Framework, the merger of the SASB with the IFRS Foundation, and the creation of the International Sustainability Standards Board (ISSB).
Our advocacy prioritizes the following:
- Value relevance for investors. Sustainability disclosures must provide investors with the kind of information they seek for making investing decisions. Some investors invest based on information relevant to financial value, while others invest based on information relevant to values. In either case, investors bear the costs of sustainability reporting and the downside risks of issuers mismanaging sustainability risks and opportunities.
- High-quality information. The characteristics of high-quality sustainability information are largely the same as those for financial information and include relevance and faithful representation.
- Integrated reporting. Sustainability disclosures are enhanced by clear links to financial information, including financial statements.
- Third-party assurance. Assurance by independent professionals with appropriate technical and assurance expertise is important. We also seek appropriate transparency of the assurance process to investors, beyond a pass/fail opinion, to understand the degree of assurance (i.e., limited vs. reasonable).
- Independent standard setting bodies. Sustainability reporting standards must be developed by independent standard setters for sustainability reporting and assurance with investor representation, public agenda setting and due process, sufficient funding, technical expertise, and protections from political interference.
- Convergence. Investors in global capital markets are best served by reporting requirements and standards that minimize jurisdictional differences and complexity.
Global
The ISSB Issues First Two Standards
Our Response to ISSB's Exposure Draft of IFRS S1
Our Response to ISSB's Exposure Draft of IFRS S2
ISSB Agenda Consultation
Our Response to Proposed SASB Standards Improvements
The IFRS Foundation’s Consultation Paper on Sustainability Reporting
Comment Letter to the IAASB on International Standard on Sustainability Assurance
What is ISSA 5000 and Why is it Important?
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United States
CFA Institute Response to SEC Proposed Rule
Position Summary of CFA Institute View in Response to the 2022 SEC Climate-Related Disclosure Proposal
CFA Institute Responds to SEC Proposal on Climate-Related Disclosures: 5 Key Takeaways
As the SEC Turns Its Attention to Human Capital, Investors and Accountants Need to Pay Attention
Other Jurisdictions
EFRAG Simplification of ESRS Standards
Response to EFRAG Call for Input on ESRS Set 1 Revision
Response to the FRC Stewardship Code Consultation
Comment Letter to UK FRC on the Sustainability Assurance Market
Enhancement of Climate-Related Disclosures under the Environmental, Social and Governance Framework
