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Carungu, Jonida, Dimes, Ruth and Molinari, Matteo (2025) EFRAG and ISSB: tensions and opportunities for convergence in the quest for the standardisation of sustainability reporting standards. Management Decision. ISSN 0025-1747 (In Press)
We critically analyse how two key standard setters, the EFRAG SRB and the ISSB, are advancing the sustainability agenda at a European and global level.
We perform a detailed analysis of more than 500 publicly available documents and of approximately 178 hours of audio recordings related to their discussions and meetings on sustainability accounting standard-setting from March 2022 to September 2024.
Analysis of key themes highlights areas of commonality, including the desire to work together on interoperability of standards, a need for integration and connectivity between financial and non-financial information, a focus on sector-specific standards and a digital taxonomy for sustainability reporting. Areas of difference also emerge, suggesting that the different stakeholders for the European and global standards are exerting pressure in different areas. While the EFRAG SRB is more focused on the applicability of the standards, in terms of double materiality and suitability for SMEs, the ISSB’s focus is more on specific matters of disclosure, including climate-related disclosures for investors and inter-alignment between the standards themselves.
Focusing on these key areas of difference, we highlight how stakeholder influence can lead to tension in the standard-setting process and what the implications of this might mean for practitioners who already face significant challenges in applying the new standards. We call on both bodies to consider the potential for Integrated Reporting to help with connectivity and stakeholder engagement. We provide a summary of the current state of play between these two key standard-setting bodies and outline numerous avenues for future research.
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