Ethical Performance
inside intelligence for responsible business
accompanying image


GRI vs IIRC vs SASB: no synergy, no leadership

March 2014

Elaine Cohen, ceo of Beyond Business Ltd, discusses the current state of play in reporting frameworks

We are witnessing a leadership battle for ownership of sustainability transparency and it’s not a good thing. Instead of playing to everyone’s strengths, we are risking moving the needle back to only one strength. The state of everyone’s bank account. The battle is being played out on the respective turfs of the IIRC, SASB and the GRI, where IIRC and SASB are focused on what investors want to know in order to make more money and GRI is focused on what companies are doing to the world that makes it more or less sustainable.

Creating a harmonized corporate transparency pathway which enables consistent and non-overlapping disclosure frameworks does not need to be a lost cause, although it looks that way at present. Even the definition of a core concept such as materiality is not consistent across these three leading organizations, as explained eloquently by Dunstan Alliston-Hope and Guy Morgan of BSR in a great article. The lack of synergy in development of different reporting and transparency frameworks is leading to fragmentation and separation, rather than collaboration and integration.

2010: The Global Reporting Initiative pronounces a goal to see a “generally accepted and applied international standard which will effectively integrate financial and ESG reporting by all organizations.” This was clearly an expectation that GRI would become an integral part of the fabric of any future integrated reporting framework. Everyone was optimistic and there was a big buzz of excitement and anticipation when the IIRC was formed in 2010, chaired by Professor Mervyn E. King, the then chair of GRI.

2011: Leaving the GRI to go dedicated at the IIRC, Mervyn King signals where he sees the future. With investors. GRI congratulates Professor King on his new appointment and looks forward to working closely with IIRC to promote Integrated Reporting. Perhaps GRI was a little too optimistic that the IIRC would even care. IIRC continues to generate momentum for integrated reporting and overlooks, it seems, a similar major reporting event which is taking place at the same time. The new-improved GRI Reporting Framework.

2012: In October 2012, the newly-formed Sustainability Accounting Standards Board (SASB) claimed it will be the US voice for material non-financial issues cutting right across the GRI and IIRC self-assumed mandates. With bold plans to create sector-based standards that identify material non-financial issues that should be included in mandatory reporting by publicly traded companies, SASB starts to shake up the mix.

2013: GRI and IIRC sign an MOU, declaring that both parties will proactively engage with each other by sharing information and striving for “complementarity” in their respective frameworks. Shame they didn’t agree to agree on a definition of materiality. That would have been an MOU with teeth. Just three months later, May 2013 was alive with the sound of eager applause at the GRI conference in Amsterdam, hailing the new G4 as the superhero way forward for sustainability reporting, with a materiality focus, and a shorter, sharper, cleaner, quicker way to relevant corporate transparency. The process-oriented G4 framework was seen by (almost) all as a massive improvement on previous GRI reporting frameworks. Oops. Just one thing missing. The G4 framework excluded all serious mention and reference to integrated reporting and guidance which had been promised.

Why? Well, the IIRC was powering up full steam ahead with its own framework, and apparently didn’t have the time to stop to think about how G4 could work to its advantage. Or it thought that G4 wouldn’t work to its advantage.
The official line was that the timelines for these two developments were different. Although, not that different. In December 2013, IIRC published the new Integrated Reporting Framework with a clear target audience: “The primary purpose of an integrated report is to explain to providers of financial capital how an organization creates value over time.”

Conspicuous by its omission in the < IR > Framework is any mention of GRI. There can be no mistake that Integrated Reporting is not about sustainability impacts. It’s about helping investors make financial decisions. Regrettably, or otherwise, that may exclude most of what is included in sustainability reporting.

The < IR > framework ignores GRI. Perhaps it’s time we stopped thinking of Integrated Reporting as an evolution of both Annual and Sustainability Reporting and accept that reality is different. Integrated Reporting plays a role in filling in the gap between top line and bottom line, and ensuring that the value-creation radar screen is not too narrow.
Sustainability Reporting plays a role in ensuring companies account for their impacts on all stakeholders. These are two purposes and despite the existence of a compelling connection between the two, no organization has successfully delivered a framework which encompasses both in a substantive way.

2014: And still, the MOU game continues. January saw the signing of an MOU between the IIRC and SASB “to more closely collaborate to advance the evolution of corporate disclosure and communicate value to investors...... Among other measures, SASB and the IIRC agree to strive for complementarity and compatibility in the ongoing development of their respective frameworks, guidelines and standards...” There’s that complementarity thing again. If only we could save the world by signing MOUs and preaching complementarity, we would all be able to sit back and take a long rest by now.

Present: So far, no single framework has earned true leadership. Sustainability Reporting is firmly entrenched and G4 is looking promising with uptake starting to emerge.

The token number, growing though it may be, of integrated reports, some of which are evidence of integrated thinking and some of which are evidence of little thinking, is unlikely to increase substantially unless we see that investors are not only demanding, but using, these wonderful new documents.

SASB is a great concept and has made fabulous progress in practice, but we have yet to see the detailed SASB standards being widely applied in any sector. In short, the battle for sustainability transparency leadership has not yet favoured any of the protagonists in an outright way, which might suggest that time and energies might be more productively used in working together rather than working apart.

Perhaps it is time that the leaders of the IIRC, GRI and SASB meet together at a Complementarity Retreat (no MOU necessary) and emerge with a set of agreed actions that will recognize the different value propositions of each framework, while ensuring a synergistic approach which will move us forward inclusively rather than driving more debate competitively.  


The full version of this article first appeared on Elaine Cohen’s CSR Reporting Blog.

Global | Reporting

3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter