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Blog | Tuesday August 10, 2021

The Urgency of Private-Sector Action on Gender-Based Violence

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Gender equality can only be achieved when women and girls live free of violence. And as of now, they do not.

Violence against women remains a globally pervasive human rights violation. One in three women worldwide will experience physical and/or sexual violence at the hands of men at some point in their lives. Women experience violence in homes, public places, and the workplace, including factory environments in global supply chains. In India and Bangladesh, for example, around 60 percent of garment workers have experienced sexual harassment in the workplace.

The COVID-19 pandemic has exacerbated these high levels of violence, with lockdowns trapping women in violent relationships. What’s more, women have also lost their jobs and livelihoods at a far higher rate than men.

An effective response to this crisis means widespread change in social norms to prevent it from happening in the first place. Public and civil society efforts and investments are not enough—the private sector must play its part.

In June 2021, BSR, in partnership with the Sexual Violence Research Initiative (SVRI) and global mining company Anglo American, hosted a panel at the Generation Equality Forum on how the private sector can prevent and address gender-based violence. Here are our key takeaways.

The Critical Role of the Private Sector

While governments invest heavily in vital response programs—such as providing critical services like health care, psychosocial support, shelters, and medico-legal services—the private sector can use its reach and influence to focus on prevention.

Prevention programs intervene early. They can include parenting interventions that address violence against both women and girls, school-based programs that address gender equality and violence, and those that aim to shift community-based social norms.

The private sector also has considerable power to change mindsets through large-scale communications campaigns, educating audiences about these prevention programs, why they are important, and the impact they create.

Case Studies in Successful Gender-Based Violence Prevention

Gender-based violence is still a pervasive issue, but several programs demonstrate that, through concerted action, significant progress is possible.

Global mining company Anglo American’s Living with Dignity initiative aims to confront gender-based violence in its host communities and operations and focuses on internal advocacy, evidence-surfacing, and strategic partnerships. It can serve as a best practice example for companies looking to implement similar programs.

Living with Dignity has produced wide-ranging changes in Anglo American’s South African workplaces, which are underpinned by vocal commitment and model behavior from leadership teams. For example, leaders across the business have received coaching on gender-based violence and harassment. And sexual harassment is seeing an increased prominence in meetings across the business and features regularly on leadership calls and town hall agendas.

Cross-sector collaborations also can help take solutions to scale. BSR’s HERrespect program, a HERproject initiative, seeks to encourage gender-equitable attitudes and relationships between women and men in global supply chain workplaces. And its impact has been palpable.

Throughout implementation of the program, HERrespect has driven lower acceptance of violence against women, increased awareness on what constitutes sexual harassment, less acceptance of gender-unequal statements, a greater sense of empowerment in stopping violence, and more awareness on internal support mechanisms for affected women.

For example, at the start of the program, 34 percent of participants believed that there are times a woman deserves to be beaten. At the end, only 15 percent agreed.

Our experience has shown us that gender-based violence is preventable. But to successfully achieve that, a multi-stakeholder approach is necessary—one that includes community-based organizations, researchers, consumers, donors, and, indeed, the private sector.

The socioeconomic impact of COVID-19 on the lives of women has created a sense of urgency for the private sector to mobilize and act. Whether it’s responding to the needs of workers in the workplace or partnering with organizations that conduct research and implement community-based programs, the opportunity for companies to address and prevent gender-based violence is massive. To learn about how your company can get involved in this work and hear from the experiences of this group, reach out to HERproject, SVRI, or Anglo American.

Reports | Monday August 9, 2021

Addressing Forced Labor and other Modern Slavery Risks: A Toolkit for Corporate Suppliers

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Businesses operating in global supply chains are more likely to encounter situations of forced labor or other forms of modern slavery than their multinational counterparts, yet many lack simple guidance on how to identify, prevent, and manage these risks effectively.

To address this gap, this toolkit from the Global Business Coalition against Human Trafficking (GBCAT) aims to help businesses that work in corporate supply chains to quickly identify areas of the business which carry the highest risk of modern slavery and develop a plan to identify, prevent, and address risks. While the toolkit is designed particularly for small- and medium-sized enterprises, it can help businesses of all sizes who are new to understanding modern slavery risks.

GBCAT has also released a one-page infographic highlighting practices to avoid the use of forced labor and has compiled a list of resources for suppliers for additional guidance on its supplier portal.

Blog | Tuesday July 27, 2021

Reflections on a Sunset: Lessons Learned from the Global Impact Sourcing Coalition

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It has been seven months since we sunsetted the Global Impact Sourcing Coalition (GISC), and I’m still troubled by the question: “Did we fail?” 

If we measure our progress against our ambitions, the answer is “yes.”  

But I’m also compelled to make the case for “no.” While it didn’t live up to its full potential, we did something extraordinary. Our effort was valuable for those who participated and positively impacted thousands of employees’ lives around the world. The experience is worth learning from.

The GISC officially launched in 2016 with the aim of building more inclusive supply chains through Impact Sourcing—a business practice where companies prioritize suppliers that intentionally hire and provide career development opportunities to people who otherwise have limited prospects for formal employment.

We began with 20 members, and by the end of 2020, we had the support of over 75 companies and stakeholder organizations hailing from 32 countries. But ultimately, at the end of last year, BSR and the GISC Steering Committee made the responsible decision to disband the GISC, releasing the resources and energy we had centralized back into the universe to support new opportunities.

At BSR, we believe that collaborations go further and deeper when they are designed for impact and that the practice of multistakeholder collaboration is very much a work in progress. In our efforts to continuously improve, we are sharing a Lessons Learned report that seeks to capture both the successes and missteps that we encountered while running the GISC—so that other collective action efforts can build on our experience. 

What Worked Well

GISC’s premise was simple: By prioritizing suppliers that have established inclusive employment initiatives, GISC members could send a powerful market signal to all corporate suppliers—which employ a fifth of the global workforce—encouraging them to compete based on their social impact. Inspired by the supplier diversity movement, we held the ambition for all large companies to pledge a percentage of their procurement spend toward suppliers that intentionally offer good, career-advancing jobs to people who formerly lived in poverty.

To our delight, this market-driven approach began to work. Many supplier companies launched or expanded their inclusive employment programs to better distinguish themselves to their clients. They also began to update their policies and practices in accordance with the requirements of the GISC’s Impact Sourcing Standard and, as a result, created more inclusive workplaces and good jobs for all employees.

Due to the commitments of companies like GISC’s supplier members to hiring the most vulnerable in their communities, the business process outsourcing (BPO) industry is both expanding its talent pool and more evenly distributing gains across entire communities.

Our most visible success resulted from a multi-year Impact Sourcing Challenge that led GISC suppliers to pledge and then meet their goal to employ over 29,000 impact workers in good jobs from 19 countries around the world. This included people on the autism spectrum in the United States, long-term unemployed youth in South Africa, and people who formerly lived in poverty in India and the Philippines. Furthermore, suppliers reported to the GISC many additional business benefits that companies often report experiencing with more inclusive and diverse cultures, such as decreased turnover and a more highly motivated workforce, further reinforcing their commitment to inclusive employment.

What We Could Have Done Better

At the same time that we were seeing these advancements, cracks in our business model began to appear, and they only deepened as the GISC grew.

Among other important lessons, we should have worked to secure, from an early stage, multiple funding partners who shared the GISC’s vision for market-driven poverty alleviation across supply chains and who could provide strategic injections of philanthropic and patient capital to support this long-term vision.

We found that a business model built entirely around membership dues was weighted by the requirement to deliver member benefits, making it more difficult to engage in forward investment and the creation of public goods. To continue our progress, we would have needed to invest in in-depth measurement and evaluation, rightsholder engagement and consultation, due diligence, advocacy to reach new audiences, and to build up an emergency fund to better react to unexpected circumstances.

And because of these missteps, just as we had the evidence that our theory of change was robust and it was time to hit the accelerator to reach scale, we ran out of the funds necessary to do so.

Through the GISC, we managed to rally a wave of professional and personal energy whose ripples continue to spread around the world in new and exciting ways. We are proud to note that, beyond GISC’s tenure, many former member companies, industry networks, and other stakeholders have stepped up to continue to champion the Impact Sourcing movement, utilizing their influence, communications, and networks to inspire more companies. Several GISC members have gone on to launch Impact Sourcing chapters and working groups, taking collaborative efforts forward in key geographies such as North America, India, and South Africa.

We hope that, in reading the Lessons Learned report, you see that we were able to go further through collective action than any one organization could have alone and that there are many metrics beyond a collaboration’s continuation that might better define impact and success.

BSR continues to support companies in developing their Impact Sourcing strategies, so please contact us to learn more. And be sure to join the Impact Sourcing Champions LinkedIn group to connect with like-minded professionals.

Reports | Tuesday July 27, 2021

Lessons Learned from a Market-Based Approach to Inclusive Employment

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BSR developed this report with the support of The Rockefeller Foundation to capture lessons learned from the launch, implementation, and sunset of the Global Impact Sourcing Coalition (GISC). We aim, through this report, to help current and future collaborative initiatives to benefit from our learnings, progress, and missed opportunities. We also seek to inform philanthropic foundations and other donors of the opportunity to support high-impact, private sector-led partnerships for sustainable development.  

The report provides an overview of the Impact Sourcing movement and the GISC, followed by an analysis of the GISC partnership against five key success factors for high impact collaborations, highlighting both successes and missed opportunities. It concludes with recommendations for the Impact Sourcing movement, future collaborations, and donors and other contributors to collaborative initiatives for sustainable development. 

Blog | Thursday July 22, 2021

Dynamic Materiality: How Companies Can Future-Proof Materiality Assessments

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This is the second in a four-part blog series dedicated to enhancing the value of materiality assessments. In the first blog, we discussed why companies should assess double materiality. Here, we explore how companies can monitor dynamic materiality.

If you conducted a materiality assessment in 2019 and are wondering if you need to refresh your assessment in light of 2020’s extraordinary events, raise your hand!

Indeed, we can expect the materiality of environmental, social, and governance (ESG) impacts to change over time for many different reasons: stakeholder activism, new regulations, or a global pandemic, to name just a few.  

The concept of “dynamic materiality” was first introduced by the World Economic Forum (WEF) in early 2020 and is gaining traction. Now, the five reporting standards—CDP, Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), and the Sustainability Accounting Standards Board (SASB)—affirm that materiality should be considered dynamic and that sustainability topics can become financially material over time. Not only that, but according to WEF, “the ability to anticipate stakeholder reactions to emerging sustainability issues and how they could affect a business and its performance is therefore critical.”

Here is how it works in theory: Businesses may take actions that negatively impact society, either through their products or their operations. Initially, the interests of companies and society are misaligned, but society tolerates this. For example, although pharmaceutical contamination of the environment has been known for years to negatively impact water supplies and human health, “companies have not yet been held responsible for this externality.”

Then a catalyst—either a change in company behavior or in societal norms—widens this misalignment. After this, stakeholder activism, regulatory responses, and corporate innovation may all push the issue from immaterial to material, whether for a single company or the whole industry.

Looking back at the concept of double materiality, impacts outward become impacts inward. Take the #MeToo movement that shed light on harassment in the workplace: Through increasing public awareness, workplace harassment rapidly became a material issue for companies like Alphabet that had to settle shareholder lawsuits related to sexual misconduct scandals. 

However, while WEF’s “framework for action” notes that increasing evidence and transparency, escalating stakeholder activism, growing responsiveness of key decision-makers, and expanding investor emphasis on ESG are all driving increased dynamism in the materiality of ESG issues, they and other reporting experts offer little guidance in discerning which ESG issues might become material in the future.

A Scenario-Driven Approach to Dynamic Materiality

Given the myriad of uncertainties about the macro environment shaping societal expectations—whether political shifts, technological innovations, or environmental changes—BSR takes a scenario-driven approach to dynamic materiality.

This entails stress-testing a materiality assessment against a set of plausible scenarios for the future to ascertain which ESG issues are likely to become more material over time, which currently immaterial issues may become material, and which ones are highly volatile—that is, highly sensitive to unpredictable shifts in the operating context.

Taking this foresight-driven approach is useful for several reasons:

• It transforms a materiality assessment from a static reporting exercise into an opportunity for strategic foresight. Internal stakeholders consider more deeply how the macro environment is driving stakeholder concerns and what drivers could reshape them in the future.
• It helps firms develop more resilient business strategies that anticipate different versions of the future and hedge against critical uncertainties. This ensures that strategy is developed looking at the road ahead rather than in the rearview mirror.
• It bolsters reporting—helping external stakeholders better understand how the company’s "materiality signature" may change over time and offering assurance that proactive steps are being taken to prepare.

Brendan Seale, former director of corporate sustainability at Scotiabank, recently spearheaded a project with BSR in which we used scenarios to stress-test materiality for his company. He said:

“As we began our materiality assessment in the fall of 2020—in the throes of the pandemic and the swelling consciousness of systemic injustice—it was obvious that many issues had become more important for Scotiabank than they were six or twelve months earlier. We wanted to explore potential changes to materiality over time, and future scenarios helped us to consider how our ESG strategy can be resilient and evolve in our rapidly changing world.”

No business can perfectly predict the future. But applying strategic foresight to materiality will improve outcomes for businesses and stakeholders alike.

To get involved in this work, contact the Sustainable Futures Lab.

Blog | Tuesday July 20, 2021

A Human Rights Assessment of the Global Internet Forum to Counter Terrorism (GIFCT)

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The Global Internet Forum to Counter Terrorism (GIFCT)—a multi-stakeholder effort founded by Facebook, Microsoft, Twitter, and YouTube—launched in 2017 with a mission to prevent terrorists and violent extremists from exploiting digital platforms.

In late 2020, GIFCT commissioned BSR to undertake a human rights assessment of its strategy, governance, and actions. Today, we are publishing the final report.

Our assessment used a methodology based on the UN Guiding Principles on Business and Human Rights (UNGPs). Given the role of governments in GIFCT, we considered the first pillar of the UNGPs (the state duty to protect human rights), as well as the second and third pillars (the corporate responsibility to respect and access to remedy). The scope of our assessment was GIFCT itself, not the actions of individual GIFCT member companies, and our assessment was primarily forward looking in focus rather than a review of prior activities.

GIFCT is a young and newly independent organization that appointed its first executive director in mid-2020. In that context, we appreciate GIFCT’s foresight for undertaking a human rights assessment at such an early stage in its evolution, and we trust that our assessment provides a framework for the integration of human rights into the strategy, governance, and actions of GIFCT over the coming years.

The full assessment is organized around nine themes, makes 47 recommendations for GIFCT, and is intended to provide useful insights for the counterterrorism field overall. Here, we emphasize five key points:

• GIFCT mission and goals: The purpose of GIFCT is to prevent terrorists and violent extremists from exploiting digital platforms, and in doing so, GIFCT enhances the protection, fulfillment, and realization of human rights—in other words, human rights for GIFCT should be about more than “avoiding harm” while pursuing its mission. GIFCT would benefit from a clearer description of the interdependent relationship between human rights and its mission that conveys human rights as a deeply embedded, complementary, and reinforcing objective in counterterrorism and violent extremism efforts.
• Terrorist and violent extremist content: The lack of consensus around definitions of terrorist and violent extremist content, and the prevalence of bias in the counterterrorism field—manifested in a disproportionate focus on Islamist extremist content—influence GIFCT’s human rights impacts. The multi-stakeholder status of GIFCT provides an opportunity to create a common understanding of terrorist and violent extremist content based on “behavior” rather than “group.” We recommended that GIFCT explore the potential benefits of this common understanding, such as pushing back against overbroad definitions deployed by governments, improving the capability of smaller companies to establish their own definitions, and creating a bulwark against “slippery slope” definitions that may extend too far into other forms of speech.
• GIFCT membership: We encountered considerable debate around whether GIFCT should increase its company membership, especially with companies headquartered outside the U.S. Given the UNGPs' emphasis on prioritizing the most severe human rights impacts, we recommended that a human rights-based approach should focus on the locations where impacts are most severe rather than where they have the highest profile. By making a proactive effort to engage more with companies and organizations outside the U.S. and Europe, GIFCT will be better positioned to achieve its mission through more engagement with companies and organizations outside the U.S. and Europe. However, expanding GIFCT membership also presents human rights risks, and we make several recommendations for GIFCT membership criteria, such as a public commitment to the International Bill of Human Rights and the UNGPs.
• Stakeholder engagement: GIFCT contains some features of a multi-stakeholder initiative (i.e. non-companies actively participate in the work of GIFCT) but lacks others (i.e. decision-making power rests solely with companies). However, stakeholder engagement plays a central role in a human rights-based approach, so we recommended that GIFCT’s work would benefit from a more deliberate integration of affected stakeholders into its work, including by broadening the range of groups engaged and clarifying the role of governments in GIFCT. GIFCT would also be strengthened by increasing its interaction with the UN Special Procedures system, the Office of the High Commissioner for Human Rights, and the UN Office of Counter-Terrorism.
• Governance, accountability, and transparency: We conclude that GIFCT’s Operating Board, which currently consists of four founding member companies, is not a sustainable model over the medium and long term and recommend that GIFCT consider the merits of transitioning to a multi-stakeholder decision-making model two years from now. We also made several recommendations to clarify, strengthen, and formalize the role of GIFCT’s Independent Advisory Committee (IAC). Given GIFCT’s connection to human rights impacts exists primarily through the actions of member companies, we placed special emphasis on the transparency requirements of GIFCT member companies, in addition to GIFCT itself.

BSR’s assessment makes recommendations in several other important areas, such as restrictions, controls, and oversight mechanisms to address the risk of overbroad removal of content by companies making use of GIFCT resources and developing a GIFCT point of view on what policies, actions, and strategies governments should deploy that would address the exploitation of digital platforms by terrorists and violent extremists in a rights-respecting manner.

The UNGPs emphasize the importance of ongoing human rights due diligence rather than a single “moment in time” assessment. In this spirit, we hope that our assessment increases the “connective tissue” across different segments of GIFCT’s work—such as the Operating Board, IAC, and working groups—and provides a foundation upon which GIFCT can grow.

Reports | Tuesday July 20, 2021

Human Rights Impact Assessment: Global Internet Forum to Counter Terrorism

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The Global Internet Forum to Counter Terrorism (GIFCT) commissioned BSR to conduct a human rights assessment of its strategy, governance, and activities. The purpose of this assessment is to identify actual and potential human rights impacts (including both risks and opportunities) arising from GIFCT’s work and make recommendations for how GIFCT and its participants can address these impacts. BSR undertook this human rights review from December 2020 to May 2021.

This assessment combines human rights assessment methodology based on the UN Guiding Principles on Business and Human Rights (UNGPs) with consideration of the human rights principles, standards, and methodologies upon which the UNGPs were built. This review was funded by GIFCT, though BSR retained editorial control over its contents. 

Reports | Thursday July 15, 2021

Responsible Product Use in the SaaS Sector

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According to many ethical and human rights frameworks, software-as-a-service (SaaS) companies have a responsibility to address adverse impacts that may be associated with their business relationships and use of their products and services.  

This paper explores how SaaS companies should develop, implement, and promote ethical use practices, encompassing acceptable use policies and service terms, best practices for customer gating, transparency measures, reporting channels, and training for customers, employees, and users. It also proposes four foundational elements to help move the field forward.

Reports | Thursday July 15, 2021

Human Rights Due Diligence of Products and Services

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Overview

Human rights due diligence (HRDD) of products and services—also known as “downstream HRDD” or “end use HRDD”—has been a requirement of the UN Guiding Principles on Business and Human Rights (UNGPs) since their endorsement by the UN Human Rights Council in 2011. However, its relevance has skyrocketed in the past few years due to the rise of technology products like social media and artificial intelligence.

As the field of supply chain due diligence has matured, the downstream value chain is increasingly becoming a focal point for more traditional sectors like pharmaceuticals and heavy industry. Now more than ever, we can see and feel the human rights impacts of business products and services, which in turn has elevated the need for businesses to take a serious look at how their products and services are designed and developed, who they are sold to, how they are used, and how they may be misused.

What Is Downstream Human Rights Due Diligence?

Downstream human rights due diligence is the assessment and prioritization of human rights impacts that occur as a result of company actions or omissions during the design, development, promotion, deployment, sale, licensing, or use of products or services. It differs from other types of business human rights due diligence because it focuses entirely on the downstream value chain, rather than the upstream supply chain or direct business operations.

Blog | Tuesday July 13, 2021

What Companies Need to Know about the International Financial Reporting Standards Foundation

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“The sustainability reporting landscape is undergoing a transformation” has been a sustainability truism for years now, but the chorus promoting this adage is growing stronger, louder, and more convincing. Why?

We’re finally starting to see tangible change. The International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB) have merged into the Value Reporting Foundation. They and three other sustainability reporting bodies—CDP, Climate Disclosure Standards Board (CDSB) and Global Reporting Initiative (GRI), known as the Group of Five—have called for closer coordination and launched a prototype climate-related financial disclosure standard.

The standard-setters that have historically governed financial reporting are also getting involved. In addition to the SEC, which recently closed a 90-day consultation on potentially mandatory climate disclosure (as well as broader ESG disclosure), the EU has adopted a proposal for a new Corporate Sustainability Reporting Directive and a game-changing EU Taxonomy.

The International Financial Reporting Standards (IFRS) Foundation, which sets reporting standards to “bring transparency, accountability, and efficiency to financial markets around the world,” is also considering how it might engage. Its financial reporting standards, developed and approved by the International Accounting Standards Board (IASB), are required in more than 140 jurisdictions around the world. In a manner similar to the IASB, the IFRS Foundation is exploring whether and how to set up an International Sustainability Standards Board (ISSB).

Feedback on a consultation paper published by the IFRS Foundation in September 2020 indicates strong interest in the organization’s potential involvement in setting sustainability reporting standards to complement financial reporting standards. As a result, the IFRS Foundation is leading a Technical Readiness Working Group to provide a “running start” for the potential ISSB to develop a sustainability reporting standard, based on financial materiality, that provides relevant information to investors.

Governments are supportive of the effort. The G7 Finance Ministers recently voiced their support for the IFRS Foundation to develop a baseline standard, and the International Organization of Securities Commissions (IOSCO) echoed their statement. This baseline standard would build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the existing work of sustainability standards-setters such as the Group of Five.

We welcome the elevation of ESG data so it is treated with the same level of rigor as financials—comparable, assurable, and recognized as critical to understanding both the impact of material ESG issues on the business and a business’s impacts on the issues.

So, what does all of this mean for you? Here are three opportunities and risks that businesses should know about the potential new sustainability standards:

1. ESG issues are material to a range of stakeholders, and non-investor audiences should also be considered. 

The IFRS proposal and creation of an ISSB will enhance reporting on enterprise value, as well as enable quality and comparability of reporting that yields better decision-making by investors. However, the reporting landscape needs standardization that provides information for stakeholders beyond investors and capital markets. There is a risk that the current framing excludes or supersedes companies’ reporting on their outward impacts on ESG issues in favor of purely the financial dimension of materiality.

2. Reporting standards need to be interoperable across regions and jurisdictions. 

The ISSB would function within the architecture and governance structure of a standard-setting body that has already been adopted by over 140 jurisdictions, enabling immediate scale and uptake of common sustainability reporting standards. However, there remains a need to align with the standards under development in the EU, and a continued question around whether or how the US follows suit (e.g. if the SEC develops a separate system for climate or ESG disclosure). Overall, if the IFRS-developed sustainability reporting standards come to fruition as a global disclosure baseline, they may best serve stakeholders if jurisdictions’ additional requirements are harmonized.

3. ESG issues should be covered by reporting standards. 

Standardized disclosure on a range of ESG issues backed by oversight bodies that link to financial reporting and public authorities is in sight. Climate is a natural starting point given the urgency of the challenge, the existence of the TCFD, and some governments (e.g. the UK and New Zealand) already mandating climate disclosure and others (e.g. the US) now exploring the matter. However, climate alone is too narrow, and the IFRS (and SEC) should reflect the fact that no responsible company today reports only on this one issue. Material non-climate ESG issues such as human rights; diversity, equity, and inclusion; and biodiversity will also need to be reported in a similar manner. This presents a risk that companies will move from a unified report to a collection of issue-specific reports that lack cohesion.

The IFRS Foundation’s recognition that investor-focused standards on enterprise value creation are interdependent with others that center on value creation for society and the environment is a positive step. A company that discloses only on the financial impact of ESG issues remains exposed to business risks stemming from their outward impacts on society and the environment. It is for this reason that both dimensions of materiality are critical; we strongly recommend a building blocks approach to reporting that takes interoperability between the dimensions into account.

A company that discloses only on the financial impact of ESG issues remains exposed to business risks stemming from their outward impacts on society and the environment.

We believe these developments are moving the reporting field in a positive direction. We must not forget, however, that financial materiality is but one lens, and a climate disclosure standard is the first step on a broader path to holistic ESG disclosure. We look forward to seeing the results of the IFRS Foundation-led working group and to continuing our engagement in the process. We strongly advise companies and reporting practitioners to do the same. The outcome will have implications for companies’ reporting governance and approval structures, integration of ESG data with financials, and where and how ESG data points are collected and reported.

This blog builds on insights shared within BSR’s Future of Reporting collaboration. Companies interested in discussing the topic further are welcome and encouraged to join the initiative, which has been closely tracking these developments.