Eumedion calls on IFRS Foundation to harmonise ESG frameworks
Blog · 04-12-2019
In this blog Martijn Bos, policy advisor at Eumedion, discusses the recent Green paper ‘Towards a global standard setter for non-financial reporting’.
The contrast in the standard setting landscape between financial reporting and non-financial reporting of listed entities could hardly be greater. There are two authoritative standard setters for financial reporting, versus countless frameworks for non-financial reporting – and none of them is authoritative across regions. This poses a major challenge for companies that want to report non-financial information. It also raises challenges for investors that want to understand how a company creates long term value and whether it lives up to the valid needs of society where non-financial performance matters.
On 30 October, we at Eumedion issued a Green paper, ‘Towards a global standard setter for non-financial reporting’, covering our preliminary views on this matter, most notably the need for a global standard setter for non-financial reporting. We suggest that it should be the IFRS Foundation that establishes such an organisation. We also assert that this should be recognised as a separate Board that sits alongside the IASB for financial reporting. The IFRS Foundation’s strong reputation for independence and a robust and proven governance structure will provide the necessary credibility to such a non-financial reporting standards board.
Our Green paper was warmly received by the speakers at a recent Eumedion symposium, which included the IASB’s Chair, Hans Hoogervorst. He noted: “The alphabet soup of organisations and standards that deal with sustainability reporting drives many people into despair. It is difficult for companies and investors to understand the multitude of organisations and standards. I therefore fully subscribe to Eumedion’s call for consolidation.”
Strong support and feedback from stakeholders is now needed to persuade the IFRS Foundation to broaden its mission and scope and to embrace the calls for non-financial reporting. We therefore urge all stakeholders to provide their feedback on this important matter.
In terms of next steps, the feedback on our Green paper will complement the insights shared with us at our recent annual conference. We aim to issue a revised position paper in April 2020. Feedback can be addressed to Martijn Bos at email@example.com by 1 February 2020.