The fragmented patchwork of different ways for companies to report and be held to account on their social and environmental performance are soon to be replaced by widely accepted and endorsed international standards for corporate sustainability.
The European Union announced its decision to develop such standards in January 2020, followed by the International Financial Reporting Standards (IFRS) Foundation proposing the development of global standards in October, later in the same year.
The question on the lips of policy makers, companies, investors and stakeholder groups is how will these two initiatives inter-relate? Will this represent a new fragmentation or can they be complementary? Will and should they converge into one?
In this article, Richard Howitt, Senior Associate at Frank Bold presents key differences between the two standard-setters, explains forces supporting their consistency, while also outlining factors that are behind their divergence. Finally, he provides a ten-point plan for better cooperation between European and global sustainability standards.
