Expectations for sustainability reporting from users, preparers, and the accounting profession

Sustainability information has become an important component of financial statement users' information needs. Over time, a mosaic of sustainability reporting standard setters and standards have emerged with users, regulators, and government creating pressure for firms to disclose ESG (environmental, social, and governance) information. Given the fragmented disclosure landscape, in 2020 the IFRS Foundation released a consultation paper proposing they create a sustainability standards board and develop a single set of standards. This study examines the expectations users, preparers, and the accounting profession have for sustainability reporting through their comment letters on topics such as the need for a single set of sustainability standards, the standards' initial subject matter, the choice of single or double materiality, and the desire for assurance on sustainability information. Our analysis documents a common desire for a single standard setter and standards. However, there is a lack of consensus and significant differences in opinions pertaining to the initial subject matter of the standards and the approach to materiality. The analysis also suggests an inverse expectations gap whereby the accounting profession is misunderstanding the level of assurance demanded by users and preparers. Subsequent Foundation actions compared to our analysis portend challenges in achieving uniformity in sustainability reporting.