Norway’s huge oil fund has weighed into the debate on finding an international standard for non-financial corporate reporting, saying a new single set of standards should build on existing codes, not start from scratch.

Norges Bank Investment Management (NBIM), which manages the NOK10.7trn (€1trn) Government Pension Fund Global, made its views known in a published response to a green paper.

At the end of October, Eumedion – a corporate governance and sustainability interest organisation for institutional investors holding shares in listed Dutch companies – published a green paper entitled “Towards a global standard setter for non-financial reporting”.

The discussion paper outlined the idea of establishing an independent, authoritative international non-financial reporting standards board to lay down rules on all material aspects of non-financial reporting for listed entities around the world.

In a letter, Carine Smith Ihenacho, chief corporate governance officer at NBIM, and Séverine Neervort, senior analyst, corporate governance at the central bank unit, wrote that they had already observed a trend toward stricter reporting requirements on environmental and social matters in some markets.

“Having a single standard setter responsible for consolidating existing standards would be helpful in this regard, providing that this organisation is independent and has robust processes in place for developing standards,” they said.

But the pair said they saw the introduction of a single sustainability standard as a long-term and complex project.

“Rather than developing a new set of metrics, we believe it is important to build on and integrate existing sustainability standards, such as those of the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI),” Smith Ihenacho and Neervort wrote, adding that they saw many aspects of these two standards as complementary.

Were a new standard setter to be set up, as Eumedion was proposing, NBIM said its starting point should be to consolidate existing frameworks that focussed on financially relevant information.

“Rather than developing a new set of metrics, we believe it is important to build on and integrate existing sustainability standards”

Carine Smith Ihenacho, chief corporate governance officer at NBIM, and Séverine Neervort, senior analyst, corporate governance at the central bank unit

“We think it important that accounting standards remain focused on the environmental and social matters that are financially material,” the letter’s authors wrote, adding that the interests of a broader set of stakeholders may be better served by other institutions.

On the overall issue of unifying non-financial reporting standard, NBIM said it did want to see “relevant, comparable and integrated disclosures from companies.”

“This would allow investors to better assess companies’ exposures to sustainability risks and opportunities, how these are managed and relevant performance metrics,” they wrote.

As things stood, Smith Ihenacho and Neervort said more companies were reporting some sustainability information than did so in the past, but that the level of detail and quality still varied a lot.

In the future, mandatory non-financial reporting requirements might be the best way to achieve consistency and a level playing field for disclosing companies, they said.

A fortnight ago, Valdis Dombrovskis, European Commission executive vice president said the EU was well placed to address the problem of there being many overlapping international reporting standards for companies and investors to contend with.

The Commission would invite the European Financial Reporting Advisory Group (EFRAG) to begin preparatory work on the standards as quickly as possible, he said.

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