Featured Product

    IFRS Announces Developments Related to Sustainability Disclosures

    November 08, 2021

    The International Financial Reporting Standards (IFRS) Foundation Trustees have announced three significant developments to provide the global financial markets with high-quality disclosures on climate and other sustainability issues. These developments constitute the formation of a new International Sustainability Standards Board (ISSB), the consolidation of Climate Disclosure Standards Board and Value Reporting Foundation into a new board by June 2022, and the publication of prototype climate and general disclosure requirements. Together, these developments fulfill the growing and urgent demand for streamlining and formalizing corporate sustainability disclosures.

    The ISSB will develop IFRS Sustainability Disclosure Standards, including disclosure requirements that address companies’ impact on sustainability matters relevant to assessing enterprise value and making investment decisions. The ISSB standards will enable companies to provide comprehensive sustainability information for the global financial markets. The standards will be developed to facilitate compatibility with requirements that are jurisdiction-specific or aimed at a wider group of stakeholders. The ISSB will build on the work of existing investor-focused reporting initiatives to become the global standard-setter of sustainability disclosures for the financial markets. To achieve this goal, the IFRS Foundation has reached commitments with the Climate Disclosure Standards Board and the Value Reporting Foundation to consolidate their technical expertise, content, staff, and other resources with the IFRS Foundation. The technical standards and frameworks of the Climate Disclosure Standards Board and the Value Reporting Foundation, along with those of the Task Force on Climate-related Financial Disclosures (TCFD) and the Forum Stakeholder Capitalism Metrics, are intended to provide a basis for the technical work of the new board. 

    Recognizing the urgency and the desire to provide the ISSB with a solid foundation on which to start its work, the Trustees created the Technical Readiness Working Group. The working group has concluded its work on two prototype documents—one that focuses on climate-related disclosures that build on the TCFD recommendations and includes industry-specific disclosures and another that sets out general sustainability disclosures. The ISSB will consider the prototypes as part of its initial work program. The Trustees are at advanced stages in appointing a Chair and Vice-Chair(s) to the ISSB. The Trustees will commence shortly a search for the additional board positions, up to the full complement of 14 members. The ISSB’s work is expected to commence as soon as the Chair and Vice-Chair(s) have been appointed and to begin with public consultations to inform the ISSB’s work plan and on proposals informed by recommendations from the Technical Readiness Working Group. The G20 Leaders and the Financial Stability Board have both welcomed the IFRS Foundation’s work program to develop global baseline standards for sustainability disclosures. 

    In addition, the Basel Committee on Banking Supervision (BCBS), the Canadian Securities Administrators (CSA), and the UK government have also welcomed the establishment of ISSB. In parallel with the ISSB's work, BCBS will explore using Pillar 3 of the Basel framework to promote a common disclosure baseline for climate-related financial risks across internationally active banks. This work will consider the availability and reliability of sufficiently granular data for banks and their counterparties, and of defined risk metrics. Additionally, Ashley Alder, Chairman of IOSCO, welcomed the publication by the IFRS Foundation of the prototype for the Climate Disclosure standard to be finalized in 2022. IOSCO notified that, by the end of 2021, it will have published its detailed analysis of the disclosure issues facing both issuers and asset managers and its assessment of sustainability data and ratings. In 2022, it will focus on a careful assessment of the ISSB’s draft climate disclosure standard, in parallel with stakeholder consultations by the ISSB. IOSCO intends to endorse the standard before the end of 2022 if it is satisfied that the standard sets a practical and effective global baseline for climate disclosures to financial markets across the globe.

     

    Related Links

    Keywords: International, Banking, Insurance, Securities, Sustainability Standards Board, ESG, COP26, Climate Change Risk, Disclosures, TCFD, Pillar 3, Basel, IOSCO, IFRS, HM Treasury, ISSB

    Featured Experts
    Related Articles
    News

    APRA Penalizes Heritage Bank for Incorrect Reporting of Capital

    The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Releases Annual Report 2021-2022

    The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance on Management of Climate Change Risks

    The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.

    November 26, 2021 WebPage Regulatory News
    News

    EBA Publishes Single Rulebook Q&A Updates in November 2021

    The European Banking Authority (EBA) Single Rulebook Question and Answer (Q&A) tool updates for this month include answers to 10 questions.

    November 26, 2021 WebPage Regulatory News
    News

    EC Proposes New Measures Under Capital Markets Union Package

    The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.

    November 25, 2021 WebPage Regulatory News
    News

    European Council Adopts Position on Digital Finance Package Proposals

    The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).

    November 25, 2021 WebPage Regulatory News
    News

    PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window

    The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.

    November 25, 2021 WebPage Regulatory News
    News

    FED Outlines Lending Conditions and Supervisory Activities in H1 2021

    The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.

    November 24, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards to Calculate Risk-Weights of CIUs Under CRR

    The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).

    November 24, 2021 WebPage Regulatory News
    News

    APRA Expects Boards to Strengthen Ability to Oversee Cyber Resilience

    The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.

    November 23, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7736