Assessing the Governance Practices of Sustainability Reporting

Policy Brief No. 71

January 8, 2016

To promote climate change risk mitigation in financial markets, the Financial Stability Board (FSB) recently proposed the creation of a Climate Disclosure Task Force, coordinated through the G20, to develop standards for companies to disclose their exposure to climate change risks. With more than 400 existing disclosure schemes that employ a range of different standards to measure climate change risks and corporate sustainability, this task will be challenging.

But the diversity of schemes also represents an opportunity to assess which practices are effective at improving corporate accountability for sustainability performance, as well as efficient at producing comparable reports that do not unfairly burden reporting organizations. This brief identifies the key categories of governance practices that must be addressed, how these divergent practices challenge end-users, and how the establishment of criteria that define effective and efficient reporting is a critical first step for the FSB and its Climate Disclosure Task Force.

About the Authors

Jason Thistlethwaite is a former CIGI senior fellow and an associate professor in the School of Environment, Enterprise and Development in the Faculty of Environment at the University of Waterloo.

Melissa Menzies is a recent graduate of the sustainability management program in the School of Environment, Enterprise and Development at the University of Waterloo. Her thesis focused on the governance of sustainability reporting and how different governance systems impact report quality.