ImpactAlpha. No. 30 – Broad financial accounting standards were pushed forward over decades by professional associations and standard-setting organizations. A similar process is now harmonizing the alphabet soup of environmental, social and governance, or ESG metrics, with the ultimate aim of converging them.
The latest development: Harvard Business School’s Impact Weighted Accounts initiative is collaborating with the Value Balancing Alliance to sync up their competing sustainability methodologies for assessing corporate sustainability performance.
“Efforts to standardize the definition, measurement, and valuation of positive and negative impacts from business on society and enterprise value need to be intensified,” the two groups said in a statement.
The move follows the establishment in early November of the International Sustainability Standards Board by the nonprofit body that sets global accounting standards. The ISSB will merge the Climate Disclosure Standards Board, an initiative of CDP, and the Value Reporting Foundation, itself a consolidation of the International Integrated Reporting Council and the Sustainability Accounting Standards Board.
Meanwhile, the Impact Management Project has wound down, as planned, and is transferring its activities to the Impact Management Platform, which will be overseen by IFC, OECD and a range of U.N. agencies.
Open ESG
The ESG Data Convergence Project aims to streamline ESG reporting for the private equity industry. A consortium including the Ford Foundation, Omidyar Network and S&P Global launched Novata to simplify ESG measurement, data collection and benchmarking for private companies and private-markets investors.
Others advocate open-source ESG data and methodologies to spur innovation and convergence.
