IFRS Sets Out Strategic Direction for Sustainability Standards Board
The IFRS Foundation Trustees have set out their views on the strategic direction for the new board for setting sustainability reporting standards. Feedback to the 2020 consultation on sustainability reporting confirmed an urgent need for global sustainability reporting standards and support for the Foundation to play a role in the development of these reporting standards. IFRS announced that the Trustees remain on track to make a final determination about a new board in advance of the November 2021 United Nations COP26 conference, including the detailed analysis of feedback on the requirements for success outlined in the sustainability reporting consultation and other conditions to be satisfied prior to that consideration.
Based on feedback received to the 2020 Consultation and encouraged by the IOSCO statement dated February 2021, the Trustees have reached the following views about the strategic direction of a new board:
- The new board would focus on information that is material to the decisions of investors, lenders, and other creditors.
- Due to the urgent need for better information about climate-related matters, the new board would initially focus its efforts on climate-related reporting, while working toward meeting the information needs of investors on other environmental, social, and governance (ESG) matters.
- The new board will build on the well-established work of the FSB Task Force on Climate related Financial Disclosures (TCFD) and work by the alliance of leading standard-setters in sustainability reporting focused on enterprise value. The Trustees will consider the prototype proposed by the alliance for an approach to climate-related disclosures as a potential basis for the new board to develop climate-related reporting standards. To prepare for this work, IFRS Foundation will initiate a process of structured engagement with the relevant organizations.
- By working with standard-setters from key jurisdictions, standards issued by the new board would provide a globally consistent and comparable sustainability reporting baseline, while providing flexibility for coordination on reporting requirements that capture wider sustainability impact.
The Trustees intend to publish a feedback statement that summarizes the responses received to their sustainability reporting consultation and how that feedback informed the above decisions. Together with the feedback statement, the Trustees will publish for public comment the proposed changes to the Foundation’s Constitution necessary to formalize establishment of a new board, including its composition. The Trustees will continue to engage with IFRS Foundation Monitoring Board and be informed of their views to proposed changes. Any changes to the Constitution are subject to a public consultation with a 90-day comment period.
Keywords: International, Banking, Insurance, Securities, Reporting, Climate Change Risk, ESG, COP26, Sustainability Standards Board, TCFD, IOSCO, IFRS
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous Article
FSC Taiwan Publishes Pillar 3 Disclosure Templates for BanksRelated Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
