Featured Product

    IOSCO Responds to IFRS Consultation on Sustainability Reporting

    December 23, 2020

    IOSCO published its response to the IFRS consultation on sustainability reporting. IOSCO supports the proposal to establish a Sustainability Standards Board (SSB) under the IFRS Foundation, subject to Trustees’ consideration of how the "requirements for success" set out in the consultation paper are met. IOSCO believes that establishing a global system architecture for sustainability reporting under the IFRS Foundation could help to promote consistency and comparability across borders and reduce the risk of fragmentation. Robust sustainability reporting standards, interconnected with financial reporting standards, would also support audit and assurance, thus enhancing trust in sustainability disclosures and laying the foundations for global and mandatory corporate reporting on sustainability.

    According to a report published in April 2020, IOSCO observed that the success of IFRS is based on certain key governance characteristics, including public accountability and the independence of its respective standard-setting bodies; rigorous, transparent and participatory due process; and assurance standards applying to the information published. Should the Trustees proceed with the proposal to introduce a Sustainability Standards Board, it will be critical that the IFRS Foundation maintains these features in its governance arrangements. IOSCO also notes the importance of securing the right expertise for developing sustainability reporting standards—including at the Trustee and Board levels—acknowledging that this expertise is distinct from traditional financial reporting expertise. It would be essential to secure appropriate funding and resourcing, with appropriate processes to safeguard the current and future funding of IASB. The Board should also be of sufficient size, with appropriate diversity in member backgrounds. Furthermore, the Board should aim to maintain geographic representation, which has been a strength of the IFRS Foundation and is outlined in the IFRS Foundation Constitution.

    IOSCO notes that the IFRS Foundation should retain the main features of its due process, based on extensive outreach and engagement with key stakeholders. This may need to be extended to include wider users of non-financial information. Meeting these requirements will help to ensure that the IFRS Foundation can take on a role in setting sustainability reporting standards without compromising its existing mission and the high-quality, standard-setting process in IASB. The Trustees should ensure that their efforts build from the existing content. It will, therefore, be important that the Trustees explore interactions with other public and private sustainability initiatives underway internationally, including efforts to consider how existing principles, frameworks, and standards can be combined to form the basis for a comprehensive corporate reporting system. One such initiative involves an alliance of five sustainability reporting organizations. IOSCO notes that the alliance recently published a "prototype" climate-related financial disclosure standards. The prototype demonstrates how existing frameworks and standards could be used, together with the recommendations of FSB Task Force on Climate-related Financial Disclosures (TCFD), to provide a running start for the development of global standards for sustainability-related financial disclosures.

     

    Related Links

    Keywords: International, Banking, Insurance, Securities, Climate Change Risk, ESG, TCFD Recommendations, Disclosures, Reporting, IFRS, Responses to Consultation, Sustainable Finance, IOSCO

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7311