Featured Product

    IOSCO Sees Support for Mandatory Sustainability Reporting

    May 10, 2021

    The Sustainable Finance Taskforce of IOSCO held two roundtables, with global stakeholders, on the IOSCO priorities to enhance the reliability, comparability, and consistency of sustainability-related disclosures and to collect views on the practical implementation of a global system architecture for these disclosures. Across the two sessions, there was strong support for the key elements of IOSCO’s vision for an International Sustainability Standards Board (ISSB) under the IFRS Foundation and a clear willingness among participants from all stakeholder constituencies to work collaboratively with IOSCO and the IFRS Foundation to deliver this vision. There was also broad-based agreement that, building on existing initiatives, the ISSB would be able to deliver high-quality international sustainability-related reporting standards to address the priority needs of capital market participants on a reasonable timeframe. The insights from these roundtables will be incorporated into IOSCO´s upcoming report on issuers´ sustainability disclosures, which is expected to be published in June 2021.

    The following are the key highlights from the roundtables:

    • Roundtable participants were united in their support for globally aligned reporting standards to promote comparability of sustainability-related disclosures across jurisdictions and to avoid market fragmentation. Many participants stressed that voluntary disclosure would not be enough and hence supported clear pathways toward mandatory reporting requirements aligned across jurisdictions, along with robust frameworks for audit and assurance.
    • There was good support for taking as a starting point the climate-related financial disclosure prototype developed by the "group of five" leading sustainability reporting organizations, published in December 2020. This prototype builds from the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and other existing content. 
    • Participants noted the importance of the work of the newly formed IOSCO Technical Expert Group, in close cooperation with the IFRS Foundation Technical Working Group, to assess the key features of the prototype. Priority areas of focus suggested by participants included emphasis on quantitative metrics and standardization to promote consistency and comparability; clarity on how to report forward-looking metrics and on methodologies for scenario analysis; encouragement of a strong linkage between sustainability reporting and financial statements, including disclosure of key assumptions; a need for industry-specific standards and metrics to accommodate the different dependencies on natural, social, and human capital across different sectors of the economy; and promotion of digitization by developing a taxonomy for sustainability-related reporting in a structured electronic, machine-readable format.
    • Feedback from participants underscored the need for a global architecture that is sufficiently flexible to accommodate a building blocks approach. There was support for IOSCO’s vision of a multi-stakeholder consultative committee under the IFRS Foundation to advise the ISSB and to promote interoperability with any sustainability reporting standards that extend beyond the common baseline of enterprise value oriented standards. However, participants stressed the importance of clearly articulating the purpose of such a committee as an advisory body to the ISSB and developing a structure and membership under the IFRS Foundation consistent with that purpose.
    • The IFRS Foundation was encouraged to leverage existing advisory groups within its architecture that provide input to the standard setting process. In this way, the ISSB would benefit from the existing inclusive and multi-stakeholder due process already in place, including channels for consultation with stakeholders across regions. The proposed consultative committee should complement (not supersede) the existing advisory groups and outreach arrangements.
    • Discussions noted that the design of ISSB standards should allow for interoperability, not only with jurisdiction-specific requirements that go beyond enterprise value creation, but also for the expansion of scope to other sustainability topics beyond climate and ongoing standards evolution to accommodate the dynamic materiality of sustainability topics over time.

     

    Related Link: Press Release (PDF)

     

    Keywords: International, Securities, International Sustainability Standards Board, Climate Change Risk, TCFD, Sustainable Finance, ESG, ISS, IOSCO

    Related Articles
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    News

    APRA Licenses Two More Banks, Reduces Committed Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) updated the list of authorized deposit-taking institutions, granting license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7866