Today, the 3rd day of COP26 in Glasgow, marked a watershed moment for sustainability disclosure.
The IFRS Foundation announced the formation of the International Sustainability Standards Board ("ISSB"), which is set to develop the IFRS Sustainability Disclosure Standards, a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. This is GREAT news for investors as well as for companies: these globally, consistent and comparable standards will help make capital markets more efficient and support its focus on long-term value creation.
Further, the 'alphabet soup' of voluntary sustainability reporting framework, shed some letters and thus complexity by the follow-on announcement that the Climate Disclosure Standards Board ("CDSB") and the Value Reporting Foundation ("VRF", which is the November 2020 merger of SASB and the IIRC) will be folded into the newly formed ISSB by June 2022.
Finally, two prototype disclosure requirements were released, one general and one climate related. These were the result of joint work that included the Task Force for Climate Related Disclosures ("TCFD"), the World Economic Forum, VRF, CDSB and among others.
The IFRS noted that it wants to move fast: the standards are expected to be in the market by the end of next year and, sooner or later, are expected to be mandatory.
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