Tuesday | 23 Jul 2024

Weighty support at COP28 for advancing the ISSB Global Standards Baseline

The International Financial Reporting Standards Foundation (IFRS) has covered the news from COP28, confirming around 400 organisations from 64 jurisdictions have committed to advancing the adoption or use of the International Sustainability Standards Board’s (ISSB) climate-related reporting at a global level.

The organisations are said to represent companies, investors, stock exchanges, the accountancy profession, multilaterals, NGOs, universities, data analytics providers and corporate advisors.

The declaration of support, announced during the COP28 Finance Day, comes at a time when “the ISSB embarks on a new phase—from creation to action,” according to the IRFS. This latest endorsement followed the June 2023 issuance of the first two ISSB Standards, both of which were subsequently recognised by the global body for international securities regulators (IOSCO).

The latest COP28 ratification demonstrated “strong support to advance action-oriented responses to the risk of climate change.”
IFRS reported that companies from around the world had been pressing for a uniformity in standards that would enable them to communicate comprehensive information to investors about their climate resilience strategy.

Separately, institutional investors had called for standards that provided “decision-useful, comparable sustainability disclosures.”

In the end, the statement attracted support from far and wide. Those who pledged their support included:

  • Corporate membership groups representing thousands of companies worldwide.
  • Over 140 companies preparing public disclosures.
  • Investor membership groups worldwide, collectively involving thousands of investors with more than $120tn in assets under management (AUM).
  • More than 70 institutional investors who signed individually.
  • At least 25 stock exchanges.
  • The African Securities Exchanges Association, representing 27 securities exchanges.
  • The Arab Federation of Capital Markets, representing 17 stock exchanges.
  • Over 40 professional accounting organisations and audit firms globally.

Approval from global regulators

With jurisdictions around the world looking to see how they might build ISSB Standards into their regulatory frameworks, it was reported that regulators and standard setters had also shown their support for the ISSB’s work from the following regions and countries: ASEAN, Brazil, Brunei, Canada, the European Union, Germany, Ghana, Hong Kong, Japan, Kenya, Mauritius, Mexico, Myanmar, Nigeria, the Philippines, Singapore, Turkey, the United Kingdom, Uruguay and Vietnam.

The creation of ISSB was originally announced at COP26, with Board supporters IOSCO and the Financial Stability Board of G20 reaffirming that they had received continued support in their endeavours from the International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), United Nations entities, the World Bank and the Asian Development Bank, as well as Network for Greening the Financial System (NGFS).

Meanwhile, the Global Reporting Initiative (GRI), CDP and the Taskforce on Nature-related Financial Disclosures (TNFD), each key ISSB partners in the sustainability disclosure landscape, all pledge their continued support for the ISSB’s work.
The ISSB said that it intended to continue working closely with these organisations “to reduce market fragmentation in the sustainability disclosure landscape.”

Proportionate and scalable

Following the strong continued strong ISSB support at COP28, the organisation’s Chair, Emmanuel Faber, said: “Signatories to this declaration represent organisations of all sizes from every continent. We recognise this as a signal of the urgency behind our work and confirmation that the ISSB Standards can deliver a vital global solution in the need for better information about the risks posed by climate.”

He recognised that market participants had been consistently telling the ISSB that they needed “proportionate and scalable” global sustainability disclosure standards, which was what the ISSB Standards had delivered.
“With the support of organisations around the world, we will work to build the market infrastructure and capacity building necessary to implement the standards worldwide,” he said, adding that the launch of an ISSB knowledge hub, which provided content to help sustain the implementation of the ISSB Standards, was a key step forward in this happening.

IFRS – ISSB at COP28: close to 400 organisations from 64 jurisdictions, including associations gathering over 10,000 member companies and investors, join multilateral and market authorities to commit to advance the ISSB climate global baseline