IFRS Issues Proposals Related to New Sustainability Standards Board
The Trustees of the IFRS Foundation proposed amendments to the Constitution of the IFRS Foundation to accommodate the potential formation of the new International Sustainability Standards Board within the governance structure of the organization. The amendments include revisions to the objectives of the IFRS Foundation and the institutional arrangements for the International Sustainability Standards Board. The consultation is open for comments until July 29, 2021. The Trustees also published a feedback statement summarizing their responses to the feedback received on the September 2020 consultation on sustainability reporting. The feedback constituted about 577 responses, which indicate growing and urgent demand for global standards and broad support for the creation of a new sustainability standards board within the governance structure of the IFRS Foundation.
The Trustees have proposed targeted amendments to the Constitution to determine whether the proposed governance structure would provide legitimate oversight of the standard-setting by a new board as well as to determine whether the proposed amendments are proportionate to the strategy of IFRS Foundation in relation to the potential work of the new board. The Trustees invite comments on the proposals to amend the Constitution to:
- Expand the objectives of the IFRS Foundation to create a board that will set IFRS sustainability standards under the governance structure of the IFRS Foundation
- Set out the structure and function of the new board
- Align other parts of the Constitution with the creation of the new board
Approval by the Trustees of the proposed amendments to the Constitution will be conditional on the establishment of the new board. The Trustees will make a final determination based on the feedback received to the exposure draft and subject to the ongoing work to satisfy the key requirements for success. The Trustees’ final determination is expected to be made in the fourth quarter of 2021. Assuming that the Trustees do finally determine to create such a board, the plans will be announced at the United Nations Climate Change Conference (also known as COP26), which is scheduled to be held in November 2021.
Comment Due Date: July 29, 2021
Keywords: International, Banking, Insurance, Securities, Sustainability Standards Board, Climate Change Risk, ESG, COP 26, Reporting, SSB, IFRS
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