Two private sector organizations recently announced cooperative efforts that will likely influence the nature of disclosures by public companies that are regarded as best practices. The International Integrated Reporting Council (IIRC) and the Global Initiative for Sustainability Ratings (GISR) announced the execution of a Memorandum of Understanding that outlines the basis for their ongoing cooperation—on March 31.

The IIRC is a global coalition of various stakeholders focused on integrated reporting. GISR is a joint project of Ceres and Tellus Institute that is creating standards for sustainability ratings, rankings, or indices intended to “transform the definition of corporate value in the 21st century such that markets reward the preservation and enhancement of all forms of capital—human, intellectual, natural, social and financial.” The two organizations have said they will strive for “complementarity and compatibility in the ongoing development of their respective frameworks and standards, and take proactive measures to work cooperatively to explore, articulate and advance the concept of ‘integrated ratings.’”

The GISR standard will consist of three components:

• Principles. These identify the core attributes of a ratings framework applicable to all sustainability ratings, rankings, and indices.

• Issues. These are themes, topics, or aspects of sustainability that are material in assessing a company’s sustainability performance.

• Indicators. This refers to metrics that measure a company’s sustainability performance for each issue.

GISR is taking into account the standard-setting activities by the Global Reporting Initiative, the Sustainability Accounting Standards Board, and the IIRC in establishing its standard. GISR will not rate companies. Instead, its standard for measuring excellence is intended to be used by others to rate sustainability performance. In December 2013, GISR released its key set of core principles that it will use for accrediting sustainability ratings worldwide. According to the press release announcing the principles, the effort to draft the principles involved “close participation from leaders in the investment and corporate communities.” GISR expects to release an exposure draft related to the issues component in 2014.