Value Reporting Foundation FAQs

Businesses and investors have asked for more clarity and simplicity in the corporate reporting landscape. There is significant momentum among important institutions around the world, including the IFRS Foundation, IOSCO, the European Commission – and increasingly, the US SEC – towards aligning the corporate reporting landscape. This merger answers the call for simplification and better positions us to support these key efforts.

The Framework and SASB Standards are complementary tools for investor-focused communications. Together, the Integrated Reporting Framework and SASB Standards provide a more complete picture of how value is created over time while meeting investor needs for comparable, consistent and reliable information. The Integrated Reporting Framework provides principles-based guidance for reporting structure and content, while SASB Standards provide industry-specific disclosure topics and metrics to help understand sustainability risks and opportunities in greater detail.

When used together, the <IR> Framework drives a holistic view of the value creation process through governance and business model disclosure, and the connectivity of information, while SASB Standards add comparability to sustainability-related data across peer companies.

The Integrated Reporting Framework and SASB Standards will remain complementary tools, however, we intend to align the Integrated Reporting Framework and SASB Standards more closely over time. While the Value Reporting Foundation will provide guidance on how to use both together, we expect organizations to use the standards and/or frameworks best suited to their needs.

No. SASB Standards will continue to be set according to the principles, processes, and practices outlined in the SASB Conceptual Framework and Rules of Procedure. The SASB Standards Board—an independent board that is accountable for the due process, outcomes and ratification of the SASB Standards—will continue to play the same role.

No, the Integrated Reporting Framework will continue as a principles-based disclosure framework that supports effective communication and reporting on strategy, governance, performance and prospects. The SASB Standards serve as a complementary tool to the Integrated Reporting Framework, providing disclosure guidance for sustainability topics connected to the creation of enterprise value.

We are prioritizing a comprehensive technical programme to look at key concepts and the architecture in the reporting landscape, the materiality determination process by businesses and incorporating sustainability issues into integrated reports. Through this process, and the work we are undertaking with the IFRS Foundation as members of the Technical Readiness Working Group, we will be best placed to understand when we will further align the SASB Standards and Integrated Reporting Framework to simplify their use by preparers.

GRI Standards play the important role of focusing on the economic, environmental and social impacts of a business, and hence its contributions – positive or negative – towards sustainable development. The Value Reporting Foundation’s key disclosure resources have a common audience of providers of financial capital, which means we are already closely aligned, and a merger is a natural step in the simplification of the reporting ecosystem. GRI remains an important partner and is a critical part of a comprehensive system of reporting. SASB Standards can be used in combination with the GRI Standards. Each set of standards complement rather than substitute the other, with GRI supporting broad and comprehensive disclosures on organizational impacts and SASB focusing on a subset of financially material information. For guidance on how to use both together, see here.

Under the Value Reporting Foundation, we will aim to achieve interoperability with the GRI Standards so that businesses can improve efficiency by using information for multiple purposes.

The Value Reporting Foundation will publish ongoing guidance, case studies and resources related to how to use Integrated Thinking Principles, the Integrated Reporting Framework and SASB Standards together.

An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation, preservation or erosion of value in the short, medium and long term.

SASB Standards provide the disclosure topics and metrics needed to assess the effectiveness of a business’s governance, strategic planning and risk management, enabling better comparability across businesses and consistent disclosure over time. The SASB Standards enable the communication of performance on the sustainability risks and opportunities reasonably likely to impact financial performance and enterprise value in each of 77 industries. SASB Standards can be used to identify specific disclosure topics and metrics for use in an integrated report.

‘Value reporting’ is the coherent system that we are working towards, which brings together the SASB Standards, Integrated Reporting Framework and Integrated Thinking Principles — as well as rigorous financial accounting standards such as IFRS or US-GAAP — to provide a comprehensive view of corporate performance to investors and other providers of capital.

Investors are hungry for information linked to enterprise value creation, but they cannot easily digest what comes from a fragmented reporting landscape. Our merger directly responds to calls from global investors to simplify the corporate reporting landscape, providing the market with an integrated solution for communicating about the drivers of enterprise value.

Investors were central to the development of the Integrated Reporting Framework via an Investor Network (which came to an end in 2014 after the publication of the Integrated Reporting Framework, although 24 investors went on to sign an ‘investor statement of support’ for integrated reporting). Investors use integrated reports to inform their view on the quality of leadership, governance and management within organizations and for qualitative insights. Integrated reports provide an understanding of how sustainability information drives the strategy and business model of the business.

SASB Standards provide investors with more detailed information on industry-specific disclosure topics and metrics. 228 institutional investors — representing $72T AUM and 23 countries — support SASB and/or use SASB Standards to inform their investment decision-making.

Under the Value Reporting Foundation, we will more closely link the concepts between the Integrated Reporting Framework and SASB Standards (and other key initiatives, such as the TCFD Recommendations), increasing coherence and making it easier for businesses to use them together if they choose to do so.

We will also use our combined resources to accelerate progress towards a comprehensive corporate reporting system – including embedding vital connectivity to financial standards — which we are best placed to do as one organization.

The Integrated Reporting Framework is already adopted by organizations in over 70 countries and signposted by over 40 stock exchanges worldwide. SASB Standards are used by companies domiciled in 53 countries and are supported by investors headquartered in 23 countries.

The Value Reporting Foundation will pursue an international approach to driving system change. By combining the resources of the IIRC and SASB, we are best positioned to be global in our approach and outreach. We will continue to have staff and secondees internationally and our governing Board will (over time) consist of Directors from every region of the world.