CDP, GRI and others urge UN countries to uphold double materiality requirements

A coalition of 11 sustainability reporting organisations including CDP and GRI are urging UN member states to uphold a requirement for companies to conduct a double materiality assessment in their upcoming reform of financing for development.

The letter – signed by GRI, B Lab, B Lab Switzerland, Capitals Coalition, CDP, Danish Institute for Human Rights, GSG Impact, International Trade Union Confederation, Social Value International, Shift, UNI Global Union, and the World Benchmark Alliance – comes as UN negotiators meet in New York to prepare for the Financing for Development conference (FfD4) later this year.

The Financing for Development conference will gather governments, international and regional organizations, financial and trade institutions, businesses, civil society and the UN System to reform the international financial architecture in order to better serve the Sustainable Development Goals (SDGs).

Ahead of the official event, taking place from June 30 to July 3 in Seville, Spain, negotiators have released a draft of the outcome document, which includes an intention to “encourage adoption of sustainability disclosure legislation based on double materiality, addressing both sustainability risks and business impacts on society”.

For the sustainability organisations that signed the letter, this particular commitment is crucial to create a sustainable economy – and should be maintained in the next draft.

“Now is the time to strengthen the foundations of a global sustainability reporting system that serves businesses, society and the environment. By upholding corporate transparency provisions in the FfD4 negotiations, governments can ensure that sustainability reporting is an enabler for mobilising capital for development,” said Peter Paul van de Wijs, GRI Chief Policy Officer.

Making ISSB and GRI mandatory

In addition, the letter also hails the draft’s commitment to transpose the International Sustainability Standards Board (ISSB) standards and the Global Reporting Initiative (GRI) standards into national law in parallel.

This, according to the signatories, would “facilitate swift government action, leveraging the standards' widespread adoption and complementarity”.

“A clear, interoperable framework based on the requirement for companies to comprehensively report on their impacts, risks and opportunities, or as the UN call it, double materiality, will empower markets, support responsible investment and align capital with sustainable and inclusive growth," added van de Wijs.

This is not the first time sustainability groups call for the mandatory adoption of ISSB standards: last year, a group of more than 120 global investors urged policymakers to make ISSB-aligned sustainability reporting mandatory around the world by 2025 to support the transition to a net zero economy.

Benefits of a harmonised sustainability reporting framework

The letter also highlights the positive impacts that adopting a harmonised global framework for corporate sustainability reporting would bring: expanding market access, strengthening financial stability, reducing costs and underpinning competitiveness in a sustainable economy.

“Leveraging the two globally established, complementary standards that have already gained widespread market adoption guarantees the availability of globally comparable and decision-useful information for investors, governments, and other stakeholders,” the signatories conclude.