The International Financial Reporting Standards Foundation (IFRS) has launched a proposal to amend its constitution to encompass the development of sustainability standards within its objectives, as it looks towards the establishment of an International Sustainability Standards Board (ISSB).
The announcement marks the next step in the development of global sustainability standards for company reporting. The initiative began in October 2020, with the release by the IFRS of a paper seeking input on the potential formation of global sustainability reporting standards, 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 including the Value Reporting Foundation, the integrated reporting-focused organization intended to be formed through the merger of the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB); the Climate Disclosure Standards Board (CDSB), and; the World Economic Forum (WEF). The Foundation also 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.
Under the new proposed amendments, the objectives of the IFRS Foundation would be expanded to encompass the development of globally accepted IFRS sustainability standards, and to outline the structure and function of the ISSB. Under the proposals, the IFRS would move to a dual board structure, overseeing both the International Accounting Standards Board (IASB), as well as the new ISSB.
The new proposals are open for a 90 day consultation period, until July 29, 2021.