World Economic Forum and Big Four Draft Toward Common Metrics and Consistent Reporting of Sustainable Value Creation

I am providing two links: the first link is to the Cooley PubCo post about the January 2020 World Economic Forum in collaboration with Deloitte, EY, KPMG, and PwC draft paper titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation, and the second link is to the draft paper.

The Cooley PubCo post is a good discussion about the progress of sustainability with links to other prior posts and materials.

The draft paper is 45 pages of materials based on four primary or core metrics: Pillar 1 – Principles of Governance; Pillar 2 – Planet; Pillar 3 – People; and Pillar 4 – Prosperity. Beginning at page 26 the paper provides an Appendix: Supplemental Information on Metrics and Disclosures which further breaks down the four Pillar’s and is quite eye opening.

I seldom spend too much time posting about drafts and proposals, and I am keeping to that habit now, but I will say that it will be interesting to see if and how this progresses, and to also keep apprised of other developments in sustainability and ESG metrics and reporting.

Here is a link to the Cooley PubCo post:

Here is a link to the draft paper titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation:


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I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

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PCAOB Proposes Significant Changes to the Audit Report – From PWC

The PCAOB has again proposed changes to the standard audit report in which the PCAOB proposes that the report disclose additional information, for example about communications to the audit committee and about judgment or estimate related issues. Here is the link to a discussion by PWC, CLICK HERE. Comments about the proposal are due by August 2016.

This is a modified version of a prior PCAOB proposal. I’m not particularly convinced that the proposal requires a detailed discussion by me at this time as, similar to legislation, the proposal will change over time and whether or not it will ever be enacted is uncertain. However, given that this is a second serious attempt to enact a change in the audit report for audits performed and that are subject to PCAOB oversight, I must believe that this attempt will have an increased chance of being enacted.

I continue to believe that the current audit report suffers from significant limitations that reduce or limit its usefulness and relevancy for investors. I question the number of audits that would be performed if not for the statutory requirement? And we are seeing other efforts to increase discussions and disclosures that are thought to be useful to investors, such as the activities of the Sustainability Accounting Standards Board and other activities by the PCAOB.

In general, these activities also should benefit the external and internal audit professions as they will make their activities even more relevant, and also likely increase their workload.

One other thought: where are audit committees on this? I believe that in general they should support these efforts: on the one hand these activities might increase audit committee complexity and workload, but on the other hand, as the audit committee is significantly dependent on information that is provided by other people (because the audit committee is not involved in the day-to-day activities of the business, and its role is diligent and informed “oversight”), this information and these disclosures tend to provide the audit committee with additional information that might help in the audit committee member’s oversight effectiveness.

Best, Dave Tate, Esq. (San Francisco/California), and here is a link to my audit committee guide, CLICK HERE

PCAOB proposes changes to audit report