There is a head of steam building up over sustainability reporting. with domestic standard setters in Australia and across in New Zealand.

This is good for those that have believed non-financial disclosure is important and needs greater action.

The sustainability standards board to be based in London will serve the same purpose as the International Accounting Standards Board.

It will set a single set of standards that will result in one set of sustainability reporting rules and this will be good from the perspective of preparers of financial statements, such as the banks.

One set of reporting rules is meant to enable companies and other entities have an easier time of it when it comes to compliance.

That is the welcome part of the strategy, but this also depends on other factors that the new standard setter will not be able to control.

Domestic regulators will have different ways of looking at issues and disputes could arise between companies and regulators on how the new body of standards will be interpreted.

Cultural elements will come into play as well so a company might comply with a perspective that is fine in Australia, but another country could pose difficulties.

A single set of standards might be fine but if regulators across the globe take different attitudes then it just adds another compliance headache to the people looking at compliance in major companies.

Australian regulators will also need to reflect on where a new sustainability standard regime sits in the regulatory environment.

Consider the fact that the corporate governance council that sits under the auspices of the Australian Stock Exchange has principles that relate to risk management disclosures, for example, and some of the issues covered in sustainability reporting will fall in risk management.

It is time for the Federal Government to reflect whether it is appropriate that the Australian Securities Exchange should shut down the corporate governance council and establish a separate standard setter for governance and sustainability disclosures.

Why should auditors have their standards and principles be binding under the Corporations Act, for example, while not everything the company directors and company officers look to comply with is under a legally backed regime?

Building a single set of standards for sustainability reporting offers a chance to streamline the development of regulation in disclosure across for-profit and not-for-profit entities under the current Financial Reporting Council.