Why sustainability standards interoperability is a red herring

By Judy Kuszewski

One of the most persistent debates in sustainability circles is around standards interoperability. The idea is that standards across different frameworks and regulations should align to simplify the process of compliance. 

At face value, the notion sounds appealing, especially for those businesses that have adopted a ‘wait and see’ approach in the hope that the reporting required of them will reduce. 

In reality, the idea delays action, diminishes the value of existing standards and weakens protections for people and the planet.  

Here’s why…and why it’s important that businesses understand this. 

Misguided aims 

Interoperability doesn’t apply to sustainability in the way it does in other industries.  

Typically, discussions about standards interoperability have related to areas like software standards, where competing organisations with the same aims and user needs work together to make their solutions compatible. 

This approach doesn’t translate to the sustainability sphere, where different sustainability standards aim to meet different needs. 

Take the Global Reporting Initiative (GRI) and the International Sustainability Standards Board (ISSB). The GRI asks for broad sustainability impact data, while the ISSB is focused on financial materiality. 

These differences aren’t just technical; they reflect the multifaceted nature of sustainability itself. Each standard has been designed with specific goals in mind. To force interoperability would compromise the value these frameworks provide.  

Dilution of credibility 

What’s encouraging is that a significant number of businesses already recognise this.  

At the end of last year, the European Commission proposed an Omnibus Simplification Package that aims to streamline reporting requirements across the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD) and the Taxonomy Regulation.  

However, major organisations including Unilever, Mars and the Ethical Trading Initiative have pushed back against proposed changes. In particular, they argue that changes will dilute the rigour and specificity of regulations like CSRD and CSDDD. 

What they are saying, effectively, is that the EU must show leadership on sustainability, not rollback on corporate accountability. Nor should the EU reward businesses whose current investments have fallen short of what is needed to transition to sustainable and resilient business models. 

These organisations also point out, quite rightly, that they have already invested significant resources in compliance and don’t want agreed legal texts to be reopened for renegotiation, potentially at significant cost to them. At this critical time for the world, what they want is certainty, not uncertainty that will confuse and delay action further. 

The benefits of existing standards 

Organisations that have adopted a proactive approach to the existing sustainability reporting ecosystem are already seeing significant benefits.  

CSDDD is encouraging businesses to integrate due diligence into forward-looking strategies, so that they can actively address human rights, climate and environmental consequences across their supply chains. 

The Taskforce on Nature-related Financial Disclosures (TNFD) is providing businesses with a framework which helps them to identify their dependencies and impacts on nature.   

Meanwhile, of the 250 largest multinationals globally, 77% already produce sustainability reports using the GRI Standards.   

There are many other examples. The process of engaging with these multiple reporting frameworks is making companies think more deeply about their sustainability efforts. Moreover, it is pushing them to think beyond the act of compliance and toward innovation, creating systems and practices that deliver long-term value. 

Looking ahead 

Ultimately, the debate around standards interoperability distracts from the pressing need to act on sustainability. Instead of waiting and hoping for a streamlined framework to emerge, businesses should embrace the current landscape, monitor its evolution and leverage it to drive meaningful change. 

For their part, standards bodies and regulators should focus more on clearer implementation guidance. At the end of last year, more than 90 organisations representing civil society, businesses, banks and investors issued a joint statement that urged the EU to improve its implementation of CSRD standards.  

This call is the right one. Better guidelines would allow businesses to focus on what really matters: improving their sustainability performance, while allocating more resources to initiatives that directly reduce their environmental and social impact and improve governance practices. 

Sustainability is inherently complex, reflecting the intricate interplay between environmental, social and economic systems and priorities. Embracing this is not a barrier to progress; it is the path to achieving it. By moving beyond the red herring of interoperability, we can focus on maintaining the courage of our convictions and getting on with the task of driving sustainable change that benefits our businesses, the communities we impact and the planet.