The Value Reporting Foundation – What is next for CDSB?

Mardi McBrien, Managing Director of CDSB, comments on the formation of the Value Reporting Foundation, announced by SASB and IIRC, and the role of CDSB.

This afternoon, after a significant amount of work behind the scenes, SASB and IIRC announced the formation of a unified organisation, the Value Reporting Foundation. This next step is singular in its importance, amidst recent announcements of intent and ambition, it represents a concrete foundation on which to build a unified corporate reporting system. 

The Climate Disclosure Standards Board (CDSB) was born in 2007 in response to the absence of International Financial Reporting Standards (IFRSs) for natural capital. The astute among you may have noticed the assonance the name of CDSB has with IASB. As a group, and since the beginning, we have been committed to advancing and aligning the global mainstream corporate reporting model to equate natural capital with financial capital. We do this by offering the market a framework for reporting environmental and climate information with the same rigour as financial information, and the success of this framework can be seen in its inclusion as the basis of the TCFD guidance.  

The announcement comes as the IFRS Foundation announced its consultation to set up a Sustainability Standards Board. 

But what did success mean for us back in 2007? At its core CDSB was set up to be incorporated into the IFRS foundation. It was clear to all of us way back then, and in fact far before, that accounting for climate in a clear, consistent, and comparable way, was an essential tool for the global market to be able to adapt to the changes we knew were coming.  

CDSB now has almost 15 years of market practice, thinking, testing, and applying our findings to bridge the gap between IFRS and environmental reporting, and so this latest announcement is not just a foundational moment for environmental standards generally, it is also an inflexion point in our own journey.  

We at CDSB are utterly convinced that the path to a sustainable future is through the alignment of standards to a global system, which harnesses the unique power of capital markets to change our global trajectory. In the coming months we will therefore be making the necessary steps to incorporate our own endeavours with that of the Value Reporting Foundation, to contribute CDSB’s wealth of knowledge to the essential work of SASB and IIRC.  

We have already enjoyed fruitful and meaningful collaboration with both the IIRC and SASB. As members of the IIRC council, we have provided our staff to support the creation of the International <IR> Framework and have collaborated ever since. SASB is a member of the CDSB Board and we have together created practical guidance to support businesses in implementing the TCFD recommendations using the SASB Standards and the CDSB Framework. Notable adoptions include the CDSB Framework embedded in other leading practice such as the Integrated Reporting Framework and TCFD recommendations. 

At this stage, and as we look to make the necessary next steps to support the unification endeavour, it is worth considering how far we have come. For the last fifteen years CDSB’s day-to-day activities have been hosted, supported and nurtured by CDP. We have grown from a team of just one, to a global network of experts and contributors spanning the globe. It is with their support that CDSB has been able to reach its maturity.  

That said, this next phase of CDSB’s journey will be a transformative one, and it brings us one step closer to the mission we set out at our inception, so we look forward to entering into exploratory discussions to integrate with the Value Reporting Foundation in the coming months. 

Our day-to-day work, which is unique among the other standard setters, advances the integration of climate and environmental-related matters into financial reporting – ensuring related risks and opportunities are reflected on corporate balance sheets. As things progress, CDSB will continue to offer this functionality to the market, plugging into the work of other global standard setters, and offering capacity building initiatives to develop this capability in businesses globally which is necessary to shift us at pace towards the net zero ambition leading investors and regulators are calling for.  

In response to the news Richard Samans, CDSB Chairman, commented: 

“2020 has clearly been a transformational year for global standard setters and CDSB is no different. We have been working, alongside other organisations, to create a more coherent sustainability reporting system that meets the needs of capital markets. CDSB’s role will remain as it was set out at our inception, to provide the market with the means to incorporate climate risk into mainstream annual reports, but with this latest announcement we look forward to exploring a future where we can join forces with our partners under the auspices of a single organisation with a common goal.”