Canada’s accounting profession’s representative body Chartered Professional Accountants of Canada (CPA Canada) announced today a call on companies, investors and governments to support the ongoing efforts to establish an International Sustainability Standards Board (ISSB).
As climate and other sustainability issues come increasingly into focus in the investing and business worlds, many companies and investors have moved to develop and act on sustainability strategies, and to align their activities and investments with their ESG values. These efforts, however, can be impeded without reliable data. While numerous standards and reporting practices have emerged, they vary significantly across regions and sectors. In fact, the lack of consistent, universal metrics to measure companies’ environmental, social and governance performance is often cited as the key obstacle for investors in integrating ESG in their investment process, and to companies’ ability to compare their performance to peers.
Seeking to address this issue, in October 2020, the International Financial Reporting Standards Foundation (IFRS) initiated a consultation process seeking input on the potential formation of global sustainability reporting standards board, and on the Foundation’s own place in that process.
After receiving positive responses to its consultation paper, the IFRS launched a working group including other sustainability and standards-focused organizations, and released its views towards the strategic direction to be taken in the formation of the new ISSB, focusing on information that is material to the decisions of investors, lenders and other creditors, beginning with climate-related issues, and extending to other ESG matters. In early May, the IFRS proposed an amendment to its constitution to encompass the development of sustainability standards within its objectives, as it looks to establish the ISSB.
Expressing support for the IFRS’ initiative, Charles-Antoine St-Jean, President and CEO of CPA Canada, said:
“This would enable clearer, consistent and comparable information needed by businesses, investors and other stakeholders, including governments and regulators.”
The IFRS’ proposed constitutional changes are open for a 90 day consultation period, until July 29, 2021. CPA Canada is urging the country’s private and public sector stakeholders to weigh in on the process.
“Now is the time to act and provide Canadian input into the consultation effort. Input at this early stage will shape the foundation of the ISSB and demonstrate strong Canadian interest and support for this major global sustainability initiative.”