The International Organization of Securities Commissions (IOSCO) announced today its support for the establishment of a Sustainability Standards Board (SSB) under the IFRS Foundation. The announcement was made in response to a consultation paper launched in October by The IFRS Foundation aiming to assess demand for global sustainability reporting standards, and to determine the foundation’s role in the development of such 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. In its response, IOSCO stated that it is in a unique position to assist the IFRS Foundation in shaping its future role in corporate reporting on sustainability, given the role of securities regulators and other capital market authorities in overseeing capital markets and their responsibility for disclosure regulations.
The organization also pointed out the benefits that would arise from the establishment of an SSB, including enhanced market trust in sustainability reporting and the creation of a foundation for mandatory corporate reporting on sustainability internationally.
Erik Thedéen, Chair of the IOSCO Sustainable Finance Task Force and Director General of Finansinspektionen of Sweden, said:
“The creation of an SSB could help to meet our objective of promoting and facilitating transparency within the capital markets. We remain committed to continuing to work with the IFRS Foundation as it considers how best to proceed post-consultation with the view to establish a global comprehensive corporate reporting system that meets the needs to capital markets and serves the public interest.”
In September, a group of leading framework and standard-setting organizations – CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) – issued a joint statement presenting a shared vision of the elements necessary for comprehensive corporate reporting, and committing to engage with key actors, including IOSCO and the IFRS among others on these efforts. Thedéen subsequently issued a letter endorsing efforts by the organizations and the IFRS Foundation to align sustainability reporting globally. In today’s announcement, IOSCO stated that together with the IFRS Foundation’s consultation, a parallel collaborative initiative of an alliance of sustainability reporting organizations can further efforts to facilitate comparable high-quality international standards that provide the content that capital markets need, within a transparent standard-setting architecture with a robust and inclusive governance structure.
IOSCO said that it is committed to helping progress these initiatives with a view to establishing a global comprehensive corporate reporting system.
Ashley Alder, IOSCO Chair and Chief Executive Officer of the Securities and Futures Commission (SFC) of Hong Kong, said:
“Establishing a global system architecture for sustainability reporting under the IFRS Foundation could help to promote the consistency and comparability across borders that capital markets need and reduce the risk of fragmentation.”