Environmental, social and governance (ESG) accounting has been fragmented for years as reporting initiatives sought to converge on a harmonised landscape for sustainability disclosures.
After a number of major announcements on new establishments, collaborations and mergers in the sustainability reporting arena in 2021, the momentum has continued as plans are turning into action.
The most notable signs of breakthrough came with open consultations on sustainability disclosure standards by the International Financial Reporting Standards (IFRS) Foundation’s International Sustainability Standards Board (ISSB), the European Financial Reporting Advisory Group (EFRAG), and the US Securities Exchange Commission (SEC) in recent months.
While the three proposals all base their rules in part under the Task Force on Climate-related Financial Disclosures (TCFD) framework, there are areas in which the proposals diverge, creating challenges for businesses to structure disclosures to meet the demands of both global investors and jurisdictional requirements.
In this article, we take a look at the three proposals and the prospects for consensus as worldwide discussions continue.