Katherine J. Brennan | Deputy General Counsel, Corporate Secretary & Chief Compliance Officer at Marsh & McLennan Companies, Inc

Connor Kuratek | Chief Corporate Counsel and Assistant Corporate Secretary at Marsh & McLennan Companies, Inc. (MMC)

Betty Moy Huber | co-head of Davis Polk’s Environmental, Social and Corporate Governance Group

Paula Simpkins | associate in Davis Polk’s Environmental, Social and Corporate Governance Group and the firm’s Corporate Department, practicing in the Capital Markets Group

This insight was first published by the Harvard Law School Forum on Corporate Governance.


Five framework- and standard-setting institutions announced a joint statement on September 11, 2020 reflecting their collaborative vision to develop a comprehensive global corporate reporting system for disclosing sustainability topics such as climate change, biodiversity, wages and skills.

The participants include the Global Reporting Initiative (GRI), CDP (formerly the Carbon Disclosure Project), Climate Disclosure Standards Board (CDSB), International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB).


| Relevance to Companies

The overarching purpose of the new system is to reduce the reporting burden on companies while improving the completeness, consistency and comparability of sustainability data available for decision-making. The participants’ plan is that companies who choose to disclose sustainability topics need to collect data only once. The companies then can choose the appropriate communication channel, such as an integrated report, a sustainability report or a website posting, depending on the applicable disclosure standard. This statement comes at a time when European Union regulators and market participants are considering how to strengthen the EU’s Non-Financial Reporting Directive, and whether companies should be required to disclose against some of the frameworks already issued by certain of the participants.


| Next Steps

 The joint statement does not provide a timeline or targeted completion date. The participants will provide market guidance on how their existing frameworks and standards can be used in a complementary way (including with respect to generally accepted accounting principles (GAAP)) and serve as a launch point for creating a new comprehensive reporting system. The joint statement acknowledges the importance of a “stepping stone” approach to achieve needed harmonization, including recognizing the role of GAAP and the regulatory perspectives on sustainability reporting around the world.


Relevant to Users of Sustainability Reporting

 The comprehensive corporate reporting system will address the needs of different types of users whose use of sustainability data varies. While there are users who are primarily concerned with a company’s impact on the economy, environment and various stakeholders, others are more concerned with the financial impact on the company’s financial performance and value creation. Investors fall in the second group because they incorporate the information in their investing and shareholder decision-making.


| How the Current Frameworks Work Together

Each contributing framework and standard-setting institution plays a critical role in what the joint statement refers to as a nested ecosystem. GRI standards generally enable companies to report sustainability information that significantly impacts the economy, environment or people and, in turn, the companies’ contributions toward sustainable development. SASB standards and the CDSB framework generally focus on sustainability information that they view as material to corporate value creation. CDSB’s framework focuses primarily on “a company’s natural capital, environmental and climate-related risks and opportunities.” In contrast, SASB standards are industry-specific and span across five subcategories of sustainability information, “including the environment, social capital, human capital, business model and innovation, and leadership and governance.” IIRC provides the integrated reporting framework that connects sustainability information to financial reporting. The nested ecosystem considers the relationship with the International Accounting Standards Board (IASB), the Financial Accounting Standards Board (FASB) and the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). Going forward, the participants view that technology will also play a crucial role in the reporting, including creating a public platform like CDP’s existing one.

While the collaboration has a substantial way to go, the joint statement provides some examples of how these frameworks and standard setters have already worked together:


SASB and CDSB’s publication of the TCFD Implementation Guide and the Good Practice Handbook;

GRI and IIRC’s jointly assisting companies in adopting the GRI standards and the IIRC’s framework; and

GRI and SASB’s collaborative effort in educating companies on how to report under both standards concurrently.


The participants call for feedback on the joint statement, invite engagement with them and welcome market support for the process.

The World Economic Forum and Deloitte facilitated the joint statement. They, together with other accounting firms, issued a draft sustainability disclosure framework in January 2020, which we discuss here.



| brief bios

 Katherine J. Brennan serves as Deputy General Counsel, Corporate Secretary & Chief Compliance Officer at Marsh & McLennan Companies, Inc. Prior to re-joining Marsh & McLennan in October 2017, Kate served as the Senior Vice President, Deputy General Counsel and Corporate Secretary at S&P Global Inc. From 2008 to 2015, Kate served in a number of leadership roles at Marsh & McLennan, including General Counsel of Guy Carpenter, Senior Corporate Counsel and Assistant Corporate Secretary.

Prior to joining Marsh & McLennan, Kate was with the law firm Dewey & LeBoeuf in New York City. At D&L, she represented clients in connection with all aspects of the corporate and securities practice with a focus on insurance-linked securities, including catastrophe bond transactions. Ms. Brennan graduated with a BA from Duke University and received her JD from the University of Virginia School of Law.