'Big Four' accounting firms set out common ESG reporting standards

Leaders of the Big Four accounting firms have joined forces to unveil a reporting framework for ESG standards.

In an article in the Financial Times published 22 September, the so-called Big Four - made up of PwC, KPMG, EY and Deloitte - have all backed the framework, which has been headed up by the International Business School (IBS), run by Bank of America chief executive Brian Moynihan.

The Big Four and the World Economic Forum were invited to identify a set of universal ESG metrics and recommended disclosures that could be reflected in the mainstream annual reports of companies. The result of this process is 21 core metrics and 34 expanded metrics and disclosures, which IBS members are encouraged to adopt. 

The report, which was seen by Professional Adviser, outlined four pillars that firms can use to approach ESG reporting standards. These pillars include; principals of governance, planet, people and prosperity.

The report said: "Each of these pillars has an important bearing on the capacity of a firm to generate shared and sustainable value. Performance in one pillar is highly interdependent with that in the others."

According to the FT, if successful, the initiative would mark the first truly coordinated approach to ESG reporting, prompting investors to move more money into the area.

Deloitte global chief executive Punit Renjen told the paper: "Right now, there is an alphabet soup of metrics. It is important for us to have a common set of standards and if there is widespread adoption it will lead to change in behaviour."

This article was first published by our sister title, Investment Week