Should FASB and IASB be responsible for setting standards for nonfinancial information?

A debate at the Oxford Union

In a world of disruptive economic change, with unprecedented challenges from global warming, social inequality and corporate governance, how best can capital markets receive the information they need to function properly?

Environmental, social and governance (ESG) information is increasingly important for investors to understand the sustainability of economic performance, and to make investment decisions accordingly. Yet the disclosure of this sustainability-related ‘nonfinancial’ information is neither standardised nor regulated, as is the norm for financial reporting. Our debate asks whether standard setters such as the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) should be given responsibility for setting standards for nonfinancial information, and if corporate ‘greenwash’ is otherwise inevitable.

Our question is reasonable to ask, since both IASB and FASB are expert in setting standards for information on company performance used by investors. Furthermore, through legislation and regulation, almost every listed company in the world must conform to one of these sets of standards. This is a mandate that no institution has with respect to corporate nonfinancial reporting. If it were extended, it is possible that nonfinancial information would have the same credibility and utility as financial information. Or not; the question is open for debate.

Motion: This House believes that corporate sustainability reporting should be mandated, and standardised by FASB and IASB, for it to be most useful for investors.

Chair: Lady Lynn de Rothschild

In proposition: Paul Druckman, Ian Mackintosh, Sir Callum McCarthy, Anne Simpson

In opposition: Jonathan Bailey, Bob Herz, Harvey Pitt, Tom Quaadman

Dinner: 7:30pm for 8pm, Exeter College, Oxford (for invited guests and paid guests only)

Keynote: Veronica Poole, Global IFRS Leader, Deloitte

Download the Green Paper (background reading for this debate)

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