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Carungu, Jonida, Di Pietra, Roberto, Molinari, Matteo and Nicolò, Giuseppe (2025) Confronting sustainability grand challenges: how do standard-setters shape sustainability reporting standards and accountability practices? Accounting, Auditing & Accountability Journal. ISSN 0951-3574 (In Press)
This study critically reflects on how international sustainability standard-setters, namely the Global Sustainability Standards Board (GSSB), the International Sustainability Standards Board (ISSB), and the European Financial Reporting Advisory Group (EFRAG)—are responding to the environmental and social grand challenges by shaping sustainability reporting standards and accountability practice.
Drawing on insights from the academic debate and the official resources of GSSB, ISSB, and EFRAG, this study performs a thematic analysis of public documents, such as meeting summaries, minutes and notes, audio recordings gathered from January 2022 to May 2024 related to the process and discussions on sustainability reporting standards.
Findings reveal how the struggle to address grand environmental and social challenges unfolds in the standard-setting arena. Sustainability reporting standards emerge from power struggles among stakeholders within this field, thereby shaping the contours of these standards, with ISSB prioritizing financial market relevance and “desired” interconnectivity, GSSB centering broader stakeholder inclusivity, and EFRAG serving the European public interest in sustainability reporting. Each standard-setter underpins a ‘split of the cake’ leitmotif. Interoperability implies a strategic approach to align the work plans between the three boards. However, this process causes negotiating tensions, where materiality definitions serve as a key area of debate.
This paper highlights how sustainability reporting standard-setting is relevant in the global response to the sustainability grand challenges, calling for more inclusive, transparent, and impactful approaches. It provides constructive reflections to address some criticisms directed at the dominant sustainability reporting standard-setters. This study highlights the interrelations between the actors involved and the need to negotiate relevant themes, such as interoperability, materiality, and connectivity.
This research introduces a critical perspective to reflect on the attempts at standard-setting by multiple actors trying to regulate the same arena in response to the urgent need for systemic change. The findings advance the sustainability accounting literature by discussing how sustainability standard-setting is not merely a technical process but a highly contested arena where legitimacy and influence are continuously negotiated.
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