Companies should use independent, standardized metrics to report on their sustainability performance, according to a statement adopted Tuesday by the Council of Institutional Investors at its fall conference.
"Investors increasingly seek decision-useful, comparable and reliable information about sustainability performance in corporate disclosures in order to better understand how non-financial metrics can impact business and profitability. CII believes that independent, private-sector standard setters should have the central role in helping companies fill that need. Market participants, non-governmental organizations and governments can aid the success of these standard setters by supporting their independence and long-term viability, attributes of which include stable and secure funding; deep technical expertise at both the staff and board levels; accountability to investors; open and rigorous due process for the development of new standards; and adequate protection from external interference," the statement said.
The standards should account for appropriate sector differences, and companies "should obtain external assurance of the sustainability performance information they provide," the statement said.
CII noted in a separate release that sustainability reporting is at a pivotal moment, with the five leading sustainability standard setters recently agreeing to work together toward comprehensive reporting, and the International Federation of Accountants proposing a sustainability standards board.
Also Tuesday, CII amended corporate governance policies to signal flexibility for virtual-only shareholder meetings during the COVID-19 pandemic; encourage electronic means for shareholders to correspond with boards; provide guidance for boards navigating meaningful opposition to their choice of auditor; and support the transparency of enforcement actions stemming from audit regulators.