Short summary of the IFRS Foundation Conference 2022

Jul 01, 2022

The IFRS Foun­da­tion Con­fer­ence 2022 was held on June 23/24. 2022, split into one sus­tain­abil­ity day and one accounting day. The IFRS Foun­da­tion has now published a short summary of the con­fer­ence on its website.

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MB discusses the ongoing activities of the ISSB

Jul 01, 2022

The IFRS Foun­da­tion Mon­i­tor­ing Board (MB) has released a short report on the meeting with the IFRS Trustees and the lead­er­ship of the International Accounting Standards Board (IASB) and International Sus­tain­abil­ity Standards Board (ISSB) in Montreal. Given current de­vel­op­ments, much of the meeting was devoted to the ongoing public con­sul­ta­tion by the ISSB on the draft standards.

The MB welcomed the strong momentum towards es­tab­lish­ing IFRS Sus­tain­abil­ity Dis­clo­sure standards and strongly en­cour­aged all stake­hold­ers to continue engaging with the ISSB and to respond to their con­sul­ta­tion. They noted:

We welcome that the ISSB is par­tic­u­larly in­ter­ested in obtaining feedback from a variety of stake­hold­ers to un­der­stand whether the proposals will provide useful in­for­ma­tion to investors and are capable of being applied and accepted globally, including by smaller companies and those in emerging markets.

The MB also en­cour­aged the ISSB to continue their outreach with preparers from different in­dus­tries and sizes.

As regards global adoption of the final standards, the MB noted that the outreach program that the ISSB has embarked on during the con­sul­ta­tion period was a positive step to putting into practice an effective building blocks approach to the in­ter­op­er­abil­ity of the ISSB global baseline. In that context, the report notes, the MB strongly supports the ISSB’s ongoing en­gage­ment with a wide variety of stake­hold­ers, including through the formation of the Ju­ris­dic­tional Working Group.

Please click to access the full report on the IOSCO website.

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Memorandum of understanding signed to establish ISSB presence in Montreal

Jun 28, 2022

On June 28, 2022, during the meeting of the Trustees of the IFRS Foundation currently taking place in Montreal, Canada, the Trustees have signed a memorandum of understanding to obtain the financial support of the Government of Canada and the Government of Quebec for the International Sustainability Standards Board (ISSB).

This support will help the IFRS Foundation to fully establish the ISSB within the Canadian sustainability ecosystem. In exchange, the IFRS Foundation has committed to scheduling initial ISSB meetings to be held in Montreal in October and December 2022 and hosting the inaugural ISSB Symposium in Montreal, with the dates to be confirmed.

Review the press release on the IFRS Foundation's website.

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Updated IASB and ISSB work plan — Analysis (June 2022)

Jun 27, 2022

On June 27, 2022, the International Accounting Standards Board (IASB) updated its work plan following its June 2022 meeting. Some clarifications now also relate to ISSB projects.

Below is an analysis of all changes made to the work plan since our last analysis on May 30, 2022.

Standard-setting projects

Maintenance projects

Research projects

Other projects

  • IFRS Sustainability disclosure taxonomy — Feedback on the staff request for feedback will be now be discussed in Q4 2022 (previously H2 2022)
  • IFRS Taxonomy update — 2022 General improvements and common practice — This project has been renamed from 2021 to 2022

The revised IASB work plan is available on the Board's website.


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IFRS Foundation announces two additional ISSB members

Jun 24, 2022

On June 24, 2022, the Trustees of the IFRS Foundation announced the appointment of Jeffrey Hales and Michael Jantzi as ISSB Board members. Their appointments mean that the ISSB is now quorate.

Mr. Hales, who has been appointed to a part-time role, has served as Chair of the SASB Standards Board since 2018 and is also a professor of accounting at the University of Texas in Austin, US. He has previously served as an academic research fellow at the Financial Accounting Standards Board (FASB) and as a member of its Financial Accounting Standards Advisory Council. His first term expires on 30 June 2027.

Mr. Jantzi joins the ISSB from Morningstar, where he currently serves as Managing Director of ESG Strategy. He is the founder and former CEO of Sustainalytics, an ESG research and ratings firm that was subsequently acquired by Morningstar in 2020. He currently serves on the Board of Directors of the Value Reporting Foundation (VRF) and of the Principles for Responsible Investment. His first term expires on 30 September 2025.

In the next several weeks, the Trustees will complete the ISSB’s full membership with further appointments in July and the goal to reach the full complement of 14 members during the third quarter of 2022.

Review the press release on the IFRS Foundation website.


IASB Chair discusses the IASB work plan

Jun 24, 2022

At the IFRS Foundation Conference currently held in London, IASB Chair Andreas Barckow discussed the IASB’s decisions on its work plan as a result of the outcomes of the IASB's third agenda consultation and the rationale for these decisions.

Mr. Barckow grouped his arguments into five major messages the IASB received from its stakeholders:

  • Completing the IASB's current work plan. The IASB will prioritize completing projects currently on the agenda before beginning new ones. It expects to continue the deliberations on its current projects throughout 2022 and the majority (if not all) of 2023. Mr. Barckow described the projects on primary financial statements, goodwill and impairment, and rate-regulated activities as being "in an intense stage of decision-making".
  • Balancing the IASB's activities. Even though standard-setting is the core activity of the IASB, it also engages in supporting the consistent application of IFRSs, assisting the digital consumption of financial reports, and actively involving in stakeholder engagement around the world. The feedback received indicates that the balance of the IASB’s activities is about right, however, there were calls for increasing the efforts on digital reporting and on understandability and accessibility of the standards. Therefore, the IASB will provide for a modest increase in these two areas.
  • Two new research pipeline projects. The IASB considered the suggestions made by stakeholders and weighed them against the criteria set for adding new projects to its agenda and the likely time needed to complete its current projects. The IASB has decided to add a comprehensive review of its standard on intangible assets, IAS 38, and a project devoted to the statement of cash flows and related matters.
  • Climate-related risks as a maintenance pipeline project. As the IASB has already published educational guidance on how to consider climate-related risks in financial statements, this will not be a full-scale project in its own right. The IASB wants to investigate whether there are any shortcomings in today’s reporting in the financial statements by entities and, if so, whether these shortcomings are due to a deficiency in its literature. Interaction with the ISSB has also to be considered in this case. 
  • A limited reserve list of two further projects. The IASB has decided to create a reserve list of projects and add operating segments and pollutant pricing mechanisms to it. They will only be added to the work plan if additional capacity becomes available unexpectedly. If they are not activated, they will be included for consideration in the next agenda consultation.

Mr. Barckow concluded his remarks with short a short discussion of the connectivity between the IASB and the ISSB and where projects on the agenda of the two Boards may overlap.

Review the full transcript of his speech on the IFRS Foundation's website.


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IESBA comments on the ISSB’S sustainability and climate-related disclosures exposure drafts

Jun 24, 2022

On June 24, 2022, the International Ethics Standards Board for Accountants (IESBA) submitted a response to the International Sustainability Standards Board (ISSB) on the ISSB’s Exposure Drafts – General Sustainability-Related Disclosures and Climate-Related Disclosures.

The IESBA believes that to meet the sustainability information needs of investors, customers, employees or potential employees, government agencies and other stakeholders, the infrastructure that supports sustainability reporting and assurance must be underpinned by the highest standards of ethical behavior.

Review the press release and response on the IESBA's website.

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Remarks by Superintendent Peter Routledge at the Responsible Investment Association Virtual Conference

Jun 23, 2022

On June 7, 2022, Superintendent Peter Routledge spoke at the 2022 Responsible Investment Association annual virtual conference. He discussed OSFI’s role in mitigating climate change risks as they relate to the financial industry, and the release of OSFI’s draft Guideline B-15 on Climate Risk Management.

In his speech, he encourages investors to provide input on the draft guidelines in an effort to ensure we get smart and effective regulations relating to climate risk management.

The Office of the Superintendent of Financial Institutions (OSFI) issued a draft version of Guideline B-15: Climate Risk Management. This guideline proposes a prudential framework that is more climate sensitive and recognizes the impact of climate change on managing risk. The draft Guideline sets the stage for OSFI’s expectations of federally regulated financial institutions.

Climate-related risks, including physical and transition risks, could have significant impacts on the safety and soundness of financial institutions, and the broader Canadian financial system. Building financial resilience against intensifying climate-related risks requires institutions to address vulnerabilities in their business model, their overall operations, and ultimately on their balance sheet.

OSFI is also introducing mandatory climate-related financial disclosures aligned with the international Task Force on Climate-related Financial Disclosures (TCFD) framework. These disclosures will incentivize improvements in the quality of the institutions’ governance and risk management practices related to climate. In doing so, this contributes to public confidence in the Canadian financial system by increasing transparency. This also aligns with a commitment made by the federal government to require financial institutions to publish climate disclosures starting in 2024.

Review the press release on the OSFI's website.

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SEC proposes rule changes to prevent misleading or deceptive fund names

Jun 23, 2022

The Securities and Exchange Commission proposed amendments to enhance and modernize the Investment Company Act “Names Rule” to address changes in the fund industry and compliance practices that have developed in the approximately 20 years since the rule was adopted. A fund’s name is an important marketing tool and can have a significant impact on investors’ decisions when selecting investments, and the Names Rule addresses fund names that are likely to mislead investors about a fund’s investments and risks. The proposal follows a request for comment the SEC issued to gather public feedback on potential reforms to the rule in March 2020.

The Names Rule currently requires registered investment companies whose names suggest a focus in a particular type of investment (among other areas) to adopt a policy to invest at least 80 percent of the value of their assets in those investments (an “80 percent investment policy”). The proposed amendments would enhance the rule’s protections by requiring more funds to adopt an 80 percent investment policy. Specifically, the proposed amendments would extend the requirement to any fund name with terms suggesting that the fund focuses in investments that have (or whose issuers have) particular characteristics. This would include fund names with terms such as “growth” or “value” or terms indicating that the fund’s investment decisions incorporate one or more environmental, social, or governance factors. The amendments also would limit temporary departures from the 80 percent investment requirement and clarify the rule’s treatment of derivative investments.

The proposing release will be published in the Federal Register. The comment period will remain open for 60 days after publication in the Federal Register.

Review the press release and proposed rule on the SEC's website.

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Future collaboration between ISSB and GRI

Jun 23, 2022

In March 2022, the International Sustainability Standards Board (ISSB) and the Global Reporting Initiative (GRI) announced a Memorandum of Unterstanding that aims at coordinating the work programmes and standard-setting activities of the two organizations. More detailed ideas of how this could be achieved have now been published.

These ideas are the outcome of a first meeting of technical representatives from both organizations where activities were discussed that could provide the necessary clarification and alignment. Among the initiatives discussed were:  

  • An agreed schedule of meetings and roadmap to advance technical aspects of the collaboration;
  • a mapping exercise to establish those requirements in the literature of both organizations that are equivalent;
  • the development of a methodology to cross-reference between the respective guidance;
  • an examination of future priorities; and
  • the development of a full articulation of the ways in which the respective standards are complementary or diverge.

Review a full outline of the planned collaboration on the IFRS Foundation's website.

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