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Companies facing shareholder demands to report more data on their environmental performance must also navigate dozens of available frameworks to the present the information.
While accounting rules standardize the ways companies have to calculate and display financial data, there are no similar mandatory rules in Canada to inform shareholders about issues such as energy use, carbon emissions, water consumption or waste generation.
A joint report last year by four organizations involved in sustainability measurement – including KPMG International – found there were almost 400 different reporting guidelines in place across 64 countries detailing how companies should report on sustainability matters.
The report, titled "Carrots & Sticks", urged governments, securities regulators and stock exchanges to work toward alignment and harmonization to make it easier for organizations to choose what standards to use.
These are some of the best known international frameworks that companies can use to guide their disclosures on sustainability issues.
1. Global Reporting Initiative (GRI)
GRI is an international organization that has developed sustainability reporting standards for companies, governments and other organizations. The Carrots & Sticks report said 39 countries and regions also reference GRI standards in their national reporting rules.
2. The International Integrated Reporting Council (IRCC)
IRCC is a global coalition of regulators, investors, companies, standard setters and accounting industry representatives. It created an international integrated reporting (IR) framework, which offers guidance on sustainability reporting. The report said a key aim is providing information for long-term investors.
3. The Sustainability Accounting Standards Board (SASB)
SASB is U.S.-based with a mandate to create reporting standards for recognizing and disclosing material environmental, social and governance impacts for companies trading on U.S. stock exchanges.
4. United Nations Global Compact (UNGC)
The compact lays out 10 accepted principles in areas such as human rights, labour, environment and anti-corruption. Signatories to the compact are required to issue an annual report on their progress on implementing the principles. Organizations that fail to issue a report on their companies can be expelled.
5. Task Force on Climate-related Financial Disclosures (TCFD)
TCFD has created the newest of the international standards. The group was convened by Bank of England Governor Mark Carney in his role as head of the Financial Stability Board and was headed by former New York mayor and businessman Michael Bloomberg.
It released its final recommendations at the end of June for voluntary financial reporting on climate change.
The TCFD website lists almost 100 companies, institutional shareholders and other organizations that have declared their support for the standards.