The nonprofit accounting organization International Financial Reporting Standards Foundation (IFRS) is to establish an International Sustainability Standards Board (ISSB) to develop comprehensive global benchmarks for sustainability reporting under robust governance and public oversight.
The announcement, made at the 2021 United Nations Climate Change Conference (more commonly known as COP26), will see the consolidation of two sustainability reporting organizations, the Value Reporting Foundation and the Climate Disclosure Standards Board, to to create a global standards body for sustainable development. disclosures for capital markets.
The IFRS has also published two prototype standards to enable the ISSB to quickly build on existing frameworks, including the Climate-Related Financial Reporting Working Group (TCFD), when developing its standards.
The standards will be the subject of a full public consultation and may be considered for adoption by the courts on a voluntary basis. Jurisdictions will have their own legal frameworks for the adoption, application or use of international standards.
Finance ministers and central bank governors from 36 jurisdictions joined the UK in publicly welcoming the announcement of the establishment of the ISSB and its work program to develop a set of consistent core standards and reliable at the international level for the disclosure of information related to sustainable development on the creation of enterprise value.
The list of relevant jurisdictions includes Australia, Brazil, Canada, Chile, China, Egypt, Ethiopia, European Commission, Fiji, France, Germany, Greece, Guatemala, India, Indonesia, Italy, Jamaica, Japan, Kenya, Korea, Luxembourg, Mexico, Morocco, Netherlands, New Zealand, Nigeria, Philippines, Saudi Arabia, Seychelles, Singapore , Spain, Switzerland, Tonga, Turkey, United Kingdom, Uruguay and United States.
Commenting on the IFRS announcement on the ISSB, Chris Cummings, CEO of the Investment Association, said: âInvestment managers need high-quality, comparable data on the risks companies face due to the climate change, and these measures will be essential for investors and businesses to work together to achieve the goals of the Paris Agreement.
He adds: “This is why we also welcome the British Chancellor’s announcement that UK listed companies will be required to produce transition plans by 2023 as the UK becomes the leading financial center. net zero. “
âInvestors want to understand the steps companies are currently taking to go net zero, so these new disclosure requirements will give investors more visibility into the immediate actions their issuers are taking. “
Elsewhere, Hong Kong Exchanges and Clearing Limited (HKEX) has joined the Glasgow Financial Alliance for Net Zero (GFANZ) and the Net Zero Financial Service Providers Alliance (NZFSPA), as part of its continued commitment to the long-term sustainable development of Financial markets.
HKEX joins financial institutions around the world in supporting global efforts to meet the goals of the Paris Agreement on climate change.
In addition, Nomura Asset Management, part of the Nomura group, has joined the Net Zero Asset Managers (NZAMI) initiative as part of their efforts to achieve net zero greenhouse gas emissions from their investment portfolios. , also in accordance with the Paris Agreement.
NZAMI was launched in December 2020 with the aim of promoting investment in companies striving to achieve net zero by 2050.