As leading academics in the field of accountancy and corporate reporting we are very proud of the role we are playing in the introduction of sustainability reporting standards. We have long recognised the importance of corporate accountability arguing that financial disclosures are not enough by themselves but need to be seen alongside sustainability-related disclosures. We have not only advocated for this change in corporate reporting, we have also been actively involved in proposing new methods and guidelines for capturing and reporting sustainability related issues.
In June 2023 we were delighted to welcome the launch by the International Sustainability Standards Board (ISSB) of its first two standards (S1 and S2). This is a huge step forward in corporate reporting and a validation of the impact we have had in this domain.
Below we reflect on our key milestones in advancing a global baseline of investor-oriented sustainability reporting and the work still to be done.
In October 2018 Richard Barker, Professor of Accounting, and Robert Eccles, Visiting Professor of Management Practice wrote a Green Paper exploring the case for the existing standard-setting regimes for financial reporting - the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) - to be widened to include setting standards for sustainability-related information.
The goal of this Green Paper was to contribute, in a neutral way, to a conversation that had been going on for some time amongst a variety of actors, concerning whether mandatory reporting standards are a prerequisite for effective ‘sustainability’ or ‘nonfinancial’ corporate reporting.
Should FASB and IASB be responsible for setting standards for nonfinancial information?
In December 2018 following the publication of the Green Paper, the question 'Should FASB and IASB be responsible for setting standards for nonfinancial information?' was debated at the Oxford Union.
Dinner speech Veronica Poole, Global IFRS Leader, Deloitte
(Disclaimer: these views were expressed in her personal capacity and not in her official position at Deloitte)
Charting the path to standards for nonfinancial information
Following the Green Paper and the Oxford Union Debate many questions were raised and work continued apace by Richard Barker and Robert Eccles. In September 2019 they produced a White Paper answering their own question - Should FASB and IASB be responsible for setting standards for nonfinancial information?
Corporate accountability is traditionally understood in terms of reporting financial performance, for the benefit of investors. But we live in a world of planetary boundaries and growing social inequality, and so investors’ information needs are changing. An economically sustainable business model is no longer one concerned with financial performance alone.
Oxford responds to IFRS Consultation on Sustainability Reporting
In September 2020 directly citing the above green paper, trustees of the International Financial Reporting Standards Foundation, the parent organisation of the IASB, published a consultation paper exploring whether the Foundation should play a role in developing global sustainability standards.
In response senior members of Oxford Saïd’s faculty, board and Global Leadership Council - Richard Barker, Vivienne Cox, Robert Eccles, Colin Mayer, Hiro Mizuno, Arunma Oteh, Paul Polman and Peter Tufano - co-authored an open letter to the Chair of the Trustees, welcoming the Foundation’s initiative in consulting on this matter.
And this was followed with a far more detailed response in December 2020 by Richard Barker and Robert Eccles.
Once again things moved quickly and a year later in November 2021 at the United Nations Climate Conference – COP26 – in Glasgow the IFRS announced the formation of a new standard setting board. the International Sustainability Standards Board to work alongside the existing International Accounting Standards Board.
Our leading voice in this domain was recognised when Richard Barker joined the ISSB as a founding member of its board to work with them to turn the proposals into high-quality, understandable and enforceable global standards for professional use. Richard was granted leave by Oxford University to take up this role, but he is still very much part of our community.
The International Sustainability Standards Board launched its first two standards in June 2023 marking a huge step forward in corporate reporting.
Commenting on this milestone Amir Amel Zadeh, Associate Professor of Accounting at Saïd Business School said: 'This is a significant step towards harmonising global sustainability standards to enable investors and other stakeholders to understand how companies measure, monitor and manage significant sustainability-related risks and opportunities and progress towards sustainability targets, particularly in relation to climate change adaptation and mitigation.'
Working for a sustainable future is a collaborative, not a competitive, exercise. We are continuing to build bridges with academic colleagues, policy makers and business organisations around the globe to initiate challenging discussions, generate innovative ideas and advance research on measuring and reporting sustainability impacts. Our work will continue to inform the work of the ISSB in setting further standards.
