The International Financial Reporting Standards Foundation (IFRS) announced that it will take the next steps towards the establishment of global sustainability reporting standards, possibly leading to an announcement on the establishment of a sustainability standards board at the meeting of the United Nations Climate Change Conference COP26 in November 2021.
The announcement follows a three-month consultation period initiated in October 2020 with the release by IFRS of a paper seeking input on the issue. The foundation stated that its trustees met this week to review the responses to the first three questions on the paper, encompassing demand for global sustainability standards, whether the IFRS Foundation should play a role, and, if so, the requirements for success in doing so.
ESG Today has reported on several of the responses from the consultation by investors, regulators, investment organizations and other standards bodies. The responses were broadly supportive of the establishment of global sustainability standards, and for the IFRS to play a role. Responses also included numerous suggestions for the standards to be successful, including a need to take into account jurisdictional differences in sustainability and sustainable finance development, calls for sustainability reporting to be mandatory, and for the standards to be based on double materiality, encompassing information about how sustainability issues impact companies, as well as on how companies affect society and the environment.
Given the positive responses, the Trustees of the IFRS Foundation announced the formation of a new steering committee to oversee the next phases. The trustees stated that they will undertake further detailed analysis of feedback on the requirements for success. Noting the urgent demand to improve the global consistency and comparability in sustainability reporting, the trustees intend to produce a definitive proposal, including a roadmap and timeline, by the end of September, ahead of COP26.