IFRS Working Group to Speed-Up Convergence in Sustainability Reporting
The IFRS Foundation Trustees announced the formation of a working group to accelerate convergence in global sustainability reporting standards focused on enterprise value. The working group will undertake technical preparation for a potential international sustainability reporting standards board under the governance of the IFRS Foundation. It will provide technical recommendations, including further development of the prototype built on recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), as a potential basis for the new board to build on existing initiatives and develop standards for climate-related reporting and other sustainability topics. The group will also review how technical expertise and content might be transitioned to the new board, to facilitate consolidation and reduce fragmentation in sustainability reporting standards.
The working group will be chaired by IFRS and will involve participation from IASB, given the need for connectivity with financial reporting. IOSCO will participate in the group as an observer, given the essential role it would play in evaluating and endorsing standards issued by a new board. During this preparatory phase, the working group will also welcome engagement with jurisdictions that are working on sustainability reporting. The first meeting of the working group is expected to take place in April 2021. The Trustees envisage that sustainability reporting standards issued by the new board would provide a global sustainability reporting baseline that would allow for greater comparability and consistency of application of the standards, while providing flexibility for coordination on additional jurisdictional and multi-stakeholder reporting requirements (a "building blocks" approach). In in parallel to the working group, the Trustees will commence work with IOSCO and relevant organizations to explore the establishment of a multi-stakeholder expert consultative committee within the IFRS Foundation structure. The consultative committee would be tasked with formalizing and streamlining the new board’s engagement with the relevant global stakeholders involved in sustainability reporting.
Keywords: International, Banking, Insurance, Securities, Climate Change Risk, Reporting, ESG, Sustainable Finance, Sustainability Standards Board, IASB, IFRS
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