IOSCO Commits to Work with IFRS on Development of a Sustainability Standards Board
The International Organization of Securities Commissions (IOSCO) announced today that it will work with IFRS Foundation Trustees towards the establishment of a Sustainability Standards Board (SSB), citing an “urgent need for globally consistent, comparable, and reliable sustainability disclosure standards.”
Ashley Alder, IOSCO Chair and Chief Executive Officer of the Securities and Futures Commission (SFC) of Hong Kong, said:
“There is an urgent demand to improve sustainability reporting in a way that meets market needs. I believe that IOSCO is in a unique position to underpin market acceptance of high-quality sustainability disclosure standards by endorsing the system architecture for sustainability standard setting under the IFRS Foundation – just as we did 20 years ago when we endorsed IFRS financial reporting standards.”
IOSCO is the leading international policy forum for securities regulators and is recognised as the global standard setter for securities regulation. The organization’s membership regulates more than 95% of the world’s securities markets. Today’s announcement was made as part of a review of the work of IOSCO’s Sustainable Finance Task Force. In its review, IOSCO stated its belief that investor demand for sustainability-related information is currently not being properly met. The organization outlined key priority areas for improvement in sustainability-related disclosures by companies and asset managers, including encouraging progress towards globally consistent sustainability reporting standards, and promoting industry-specific metrics in sustainability-related disclosures and standardization of narrative information.
In order to further these goals, IOSCO reiterated its support for the creation of a sustainability standards board under the IFRS, and pledged to work towards its establishment.
In October 2020, the IFRS launched a consultation paper aiming to assess demand for global sustainability reporting standards, and to determine the foundation’s role in the development of such standards. The organization recently completed its consultation, and earlier this month announced that it will take the next steps towards the establishment of global SSB.
In addition to its commitment to work with the IFRS foundation, IOSCO outlined several recommendations for the work towards an SSB. One of its key recommendation is to take a ‘climate first’ approach to standards development, given the urgency of the climate crisis, to be followed shortly by standards for other sustainability topics.
Erik Thedéen, Chair of the IOSCO Sustainable Finance Task Force and Director General of Finansinspektionen of Sweden, said:
“IOSCO proposes a pragmatic approach supporting ‘climate first’, though with a clear path to covering the breadth of sustainability topics, and to drive international consistency on core enterprise value-related information while establishing a mechanism that supports interoperability with jurisdiction-specific requirements.”