Association, GAA support IFRS Foundation’s sustainability reporting standards board proposal

The Association of International Certified Professional Accountants and the Global Accounting Alliance (GAA) have sent letters to the IFRS Foundation in support of a proposal that proposes to establish a new standard-setting board and task it with improving the consistency and comparability of global sustainability reporting.

The proposal was issued in a consultation paper in September by a task force the IFRS Foundation trustees established more than a year ago. In a letter dated 10 December, the GAA supported the proposal. The GAA is made up of ten leading professional accountancy organisations, including the Association.

“The GAA believes that there is an urgent need for global sustainability reporting standards,” the GAA letter to the IFRS Foundation says. “The IFRS Foundation is well positioned to play a key role in the development of globally accepted sustainability reporting standards.”

The Association, in a letter dated 14 December, also individually supported the IFRS Foundation proposal to expand its standard-setting activities to address disclosure of sustainability-related issues, including company efforts to combat climate change.

“We believe that the IFRS Foundation is right to propose the expeditious development of a process for setting global, internationally recognized non-financial reporting standards,” the letter says. It was signed by Andrew Harding, FCMA, CGMA, the Association’s chief executive–Management Accounting.

Harding suggested the IFRS Foundation leverage existing major reporting initiatives, including the Sustainability Accounting Standards Board, the International Integrated Reporting Council, the Climate Disclosures Standards Board, the Global Reporting Initiative, and the work of the Task Force on Climate-Related Financial Disclosures, with the aim to reduce complexity and avoid duplication.

“One message that we hear often from companies and accounting firms is that proliferation of new standards by different bodies should be discouraged,” the Association letter says.

The IFRS Foundation will accept comments on the consultation paper until 31 December 2020. They can be emailed to or submitted digitally to

Comments should address the need for global sustainability standards, whether the IFRS Foundation should play a role, and what that role should look like.

What the IFRS Foundation proposes

Large institutional investors, central banks, regulators, auditing firms, public policymakers, and businesses are increasingly interested in climate-related risks and sustainability indicators, according to the IFRS Foundation’s consultation paper.

The demand is driven by changing consumer behaviour, along with investor concerns about managing risks, understanding long-term value creation, and efforts to mobilise capital for green and low-carbon investments.

With about 80% of a company’s value coming from intangibles such as brand, employee purpose, and technological know-how, business executives need a broader base of nonfinancial information to make effective decisions and manage performance, according to the Association’s support letter. Similarly, investors and other stakeholders urgently need a broader base of information for their investment and credit decision-making arsenal.

To help address the increasing demand for consistent and comparable sustainability reporting, the IFRS Foundation proposes to:

  • Establish a Sustainability Standards Board as an independent standard-setting board of experts. The SSB would operate alongside the International Accounting Standards Board (IASB), the IFRS Foundation’s accounting standard-setting body, and be subject to governance and oversight by the trustees and the IFRS Foundation Monitoring Board.
  • Task the SSB with developing global sustainability standards based on existing sustainability frameworks and standards. The SSB would initially focus on climate-related risks. As stakeholders demand change, the board’s work could broaden over time and address the interrelationship between environmental, social, and governance factors.
  • Focus SSB efforts on the development of sustainability standards that provide sustainability information most relevant to investors and other market participants.
  • Deliver standards that allow companies to disclose sustainability information that can be externally assured.

Sabine Vollmer ( is an FM magazine senior editor.