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Beyond harmonisation: Building a non-financial reporting community of practice

Dr Tim Kasim, member of the CDSB Technical Working Group, discusses harmonisation as an opportunity for creating a community of practice which transcends institutional boundaries, and offers some insight for harnessing tensions into a productive friction in a community of practice.

On 11th September 2020, five leading sustainability and integrated reporting framework-setting and standard-setting institutions (CDP, CDSB, GRI, IIRC, and SASB) announced a joint vision to harmonise and move toward comprehensive corporate reporting. My aim here is to offer an academic perspective in thinking about the harmonisation problem and to highlight the potential issues that lie ahead.

This is a timely response toward recent calls for greater harmonisation in the non-financial reporting space (de Cambourg Report, 2019; Accountancy Europe, 2019; Barker and Eccles, 2018). The urgent need for harmonisation stems from the increasing fragmentation of the non-financial reporting landscape characterised by the overlapping objectives, boundaries, and terminologies between the frameworks and standards (CDSB, 2016). If the problem as we began this journey was too little guidance, the problem today is that there is too much, from too many places. Given the changing nature of the landscape, there is an increasing need for a co-ordinating mechanism to bring together the common interests among the different organisations while, at the same time, preserving the unique sets of capacity and expertise that each offers.

First, let us take a step back and think about the harmonisation problem in a wider context. If we ask, is the harmonisation problem unique to the non-financial reporting landscape?

The answer is, in fact, no. The academic literature has extensively shown that major institutional changes tend to be heralded by independent innovations which establish the technical possibility of transitioning toward a new system (Greenwood, Suddaby, and Hinings, 2002). For example, the infamous competition between Thomas Edison and Nikola Tesla ultimately paved the way for the successful institutionalization of electricity. Closer to our field, Botzem and Quack (2006) remind us that the International Accounting Standards Committee (IASC), the predecessor of the modern day International Accounting Standards Board (IASB), started out as a coalition of national professional accounting bodies whose diversity in standard-setting  fared no better than the non-financial reporting landscape today.

While the IASB’s success has often been attributed to the success of securing the EU’s endorsement, it was built on the foundation laid by the IASC. By far the most important role of the IASC was creating a ‘community of practice’ (Wenger and Snyder, 2000) of financial reporting experts who, despite their diverging views of accounting, grew to develop a common vision and identity over time. Today, the IASB stands proud as the guardian of the capital market – this was a vision crystalized over the years through the countless contestations and conflicts within the IASC. A parallel to the IASC could be drawn to the CDP, CDSB, GRI, IIRC, and SASB’s intention to harmonise their frameworks and standards. No doubt, the path ahead is fraught with contestations and conflicts, but there is no doubt that it is the right way forward.  

Second, harnessing the tensions into productive frictions would require a co-ordinating mechanism to bring together the convergent and divergent interests of the organisations. It all sounds paradoxical, but here is another area where the academic perspective could offer some insight. Particularly the literature on ‘boundary organisation’ which can be defined as a temporary nexus for facilitating collaboration between parties with diverging interests. O’Mahony and Bechky (2008) argue that a boundary organisation is both rigid and flexible – it is rigid enough to offer a governance mechanism for fostering the common identity between different organisations, yet it is flexible enough to preserve their respective independence as it sets out the limit to each organisational member’s rights to contribute toward the common purpose. In other words, it allows one to ‘wear two hats’ – one of the boundary organisation and another of the home organisation. In a sense, this is what the CDSB has been doing all along which makes it uniquely placed to draw on its experience to further the harmonisation of sustainability and integrated reporting, and possibly financial reporting.

This approach of wearing ‘two hats’ should be applied indiscriminately to each organisation especially the powerful one, for example, the IASB if it were to be a part of the conversation. This would ensure each framework-setting and standard-setting bodies retain its innovative capabilities in pursuit of the common vision.



Accountancy Europe. (2019). Interconnected Standard Setting for Corporate Reporting. Cogito. Available from: https://www.accountancyeurope.eu/publications/interconnected-standard-setting-for-corporate-reporting/

Barker, R., & Eccles, R. G. (2018). Should FASB and IASB be responsible for setting standards for nonfinancial information? (Green Paper: 12 October 2018). Oxford: Saïd Business School. Available from: https://www.sbs.ox.ac.uk/research/research-overview/responsible-business/future-corporate-reporting

Botzem, S., & Quack, S. (2006). Contested rules and shifting boundaries: International standard-setting in accounting. In M. Djelic & K. Sahlin-Andersson (Eds.), Transnational Governance: Institutional Dynamics of Regulation (pp. 266-286). Cambridge: Cambridge University Press.

CDSB. (2016). Mapping the sustainability reporting landscape: Lost in the right direction. ACCA Global. Available from: https://www.accaglobal.com/gb/en/technical-activities/technical-resources-search/2016/may/mapping-sustainability-reporting-landscape.html

de Cambourg Report. (2019). Ensuring the relevance and reliability of non-financial corporate information: An ambition and a competitive advance for a sustainable Europe. Report submitted to the Minister for the Economy and Finance. Autorité des Normes Comptables.

Greenwood, R., Suddaby, R., & Hinings, C. R. (2002). Theorizing change: the role of professional associations in the transformation of institutionalized fields. The Academy of Management Journal, 45(1), 58–80.

O'Mahony, S., & Bechky, B. A. (2008). Boundary organizations: enabling collaboration among unexpected allies. Administrative Science Quarterly, 53(3), 422–459.

Wenger, E. C., & Snyder, W. M. (2000). Communities of practice: The organizational frontier. Harvard Business Review, January-February 2000. Available from: https://hbr.org/2000/01/communities-of-practice-the-organizational-frontier