The Council of the Islamic Financial Services Board (IFSB) responded to the International Sustainability Standards Board (ISSB) exposure drafts on general sustainability-related disclosures (IFRS S1) and climate-related disclosures (IFRS S2).
In its response, IFSB welcomed the progress of ISSB toward the development of a global baseline standard for sustainability and climate-related disclosures. IFSB expressed strong support for the convergence and harmonization of global standards on sustainability and climate-related risks and outlined certain suggestions for improvement. IFSB highlighted, among others, the need to
- clarify the definition of sustainability
- minimize the potential of green-washing and misleading reporting
- establish clearer boundaries on materiality to avoid subjective reporting
- clarify the application of proportionality to smaller entities
- issuance of sector-specific guidance
IFSB is concurrently working on developing sustainability-related standards for the Islamic financial services industry. IFSB plans to complement the work of international standard-setters including the ISSB, in addressing the specificities of Islamic finance as per its mandate.
Related Link: Press Release
Keywords: International, Banking, Islamic Banking, Disclosures, ESG, Climate Change Risk, Sustainable Finance, ISSB, Exposure Draft, Reporting, IFSB
Hasan leads Moody’s Analytics ESG methodology development. He is expert on carbon transition, nature related risks and is a guest lecturer at ESSEC Business school on sustainable finance.
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