IOSCO Publishes Report on Sustainability-Related Issuer Disclosures
IOSCO published a report on the sustainability-related disclosures of corporate issuers. The report, which is prepared by the Sustainable Finance Taskforce, focuses on three priority improvement areas in corporates’ sustainability-related disclosures and presents the IOSCO vision for how these priorities could be delivered by the International Sustainability Standards Board. The priority areas encompass encouraging globally consistent standards, promoting comparable metrics and narratives, and coordinating across approaches. The report also sets out the vision of IOSCO for a global corporate reporting architecture to deliver on these priority improvements. The report presents an indicative timeline for delivering the priority improvements, which span until June 2022.
Among others, the report summarizes the work that IOSCO has done to develop its vision for an International Sustainability Standards Board under the IFRS Foundation. It considers the materiality lens for sustainability-related reporting standards, which has been an important topic of discussion in the context of ongoing sustainability reporting initiatives. It demonstrates investor demand for sustainability-related information and evidence that this demand is not being properly met. It also demonstrates the need for improvements in the current landscape of sustainability standard-setting. The report identifies core elements of standard-setting that could help meet investor needs and provides input to the IFRS Foundation on governance features and mechanisms for stakeholder engagement, which will be essential to making the International Sustainability Standards Board initiative successful. This report is a crucial part of the IOSCO engagement with the IFRS Foundation. IOSCO looks forward to further collaboration with the IFRS Foundation Trustees as they continue their technical preparations and assess possible constitutional changes toward establishing an International Sustainability Standards Board by November 2021. The report also discusses the Taskforce's next steps on sustainability-related financial disclosures of corporate issuers and these steps comprise the following key strands of work:
- Monitoring the IFRS Foundation Trustees’ plans for the design and establishment of the International Sustainability Standards Board, including playing a leading role in the Monitoring Board of the IFRS Foundation.
- Provided IOSCO’s expectations are satisfied, considering market acceptance of the International Sustainability Standards Board’s future standards and setting a pathway for the International Sustainability Standards Board’s sustainability reporting standards to serve as the baseline for consistent and comparable approaches to mandatory sustainability-related disclosures across jurisdictions, in light of domestic legal frameworks.
- Supporting the practical implementation of the building blocks approach, including working with the IFRS Foundation on the design of a multi-stakeholder consultative committee as well as with key jurisdictions and other stakeholders across the official and private sectors.
- Developing approaches to support securities regulators’ supervision of sustainability-related disclosures once the ISSB’s reporting standards are in place.
- Influencing the development of an audit and assurance framework and related standards for corporate sustainability-related disclosures.
- Overseeing the transition to the "steady state" for IFRS sustainability-related financial reporting standards, including expansion of the scope of the International Sustainability Standards Board standards beyond climate change.
- Contributing securities regulators’ perspectives as part of the ongoing development of sustainability-related reporting standards, including input to post implementation reviews of the International Sustainability Standards Board’s governance structure and standards.
IOSCO anticipates significant progress in delivering the key elements of its vision over the coming months to help address the priorities for improvement identified by IOSCO.
Related Links
Keywords: International, Banking, Securities, Disclosures, Climate Change Risk, ESG, Sustainability Standards Board, Sustainable Finance, Reporting, IFRS, IOSCO
Featured Experts
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
Douglas Dwyer
Credit risk modeling expert; machine learning researcher; quantitative and statistical data analyst
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
Previous Article
HMT Proposes Rule Changes Resulting from New Investment Firms RegimeRelated Articles
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.
OSFI Releases Annual Report 2021-2022
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
APRA Finalizes Capital Adequacy Standards for Banks
The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.
CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.
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.
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.
EC Finalizes Rules on Internal Approaches Benchmarking Exercise
The European Commission, or EC, finalized the Implementing Regulation 2021/2017 with respect to the benchmark portfolios, reporting templates, and reporting instructions for the supervisory benchmarking of internal approaches for calculating own funds requirements.
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.
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).
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.
