1. Introduction
The objective of this research was to analyze the main arguments that would legitimize the International Financial Reporting Standards (IFRS) Foundation to institutionalize the International Sustainability Standards Board (ISSB). The increasing global demand for business to disclose sustainability information (Siew, 2015; Hoang, 2018; Chipalkatti et al.,2021) has created a perceived need to align sustainability reporting (Adams and Abhayawansa, 2022). The absence of a regulatory framework overseeing the disclosure of sustainability information (Eccles et al., 2012; De Villiers and Maroun, 2017; Ioannou and Serafeim, 2017) instigated the IFRS Foundation to act. The Foundation, which has played a central role in setting accounting standards (Pacter, 2005), conducted a public consultation in 2020 regarding the creation of a new board (the ISSB) to set standards for sustainability reporting. This initiative was supported by The International Organization of Securities Commissions (IOSCO, 2021).
A few months after the conclusion of the public consultation, the IFRS Foundation released a feedback statement on the results, claiming the proposal received widespread support, using this last assertion as an argument to legitimize the creation of the ISSB (IFRS Foundation, 2021). However, a study conducted by Adams and Mueller (2022) showed that 72% of academics with research background in the field opposed the IFRS Foundation’s proposals. Their study motivated us to explore the responses of all other participants to discern which stakeholder groups expressed support and, more specifically, identify the bases of the legitimacy for the IFRS Foundation to establish the ISSB.
According to legitimacy theory, organizations operate under a “social contract” between society and the organization (Dowling and Pfeffer, 1975; Suchman, 1995; Deegan et al., 2002; Macagnan and Seibert, 2021). The legitimacy of an organization must be recognized by society, rather than being limited to specific stakeholder groups. Adams and Mueller (2022) highlighted that the key scientific community is against the proposal to institutionalize the ISSB. This led us to infer that there were key divergences in the positions of those interested in the institutionalization of the ISSB to establish standards for sustainability reporting. Adams and Mueller’s sample consisted of 39 comment letters (which were signed by...
