IFRS Foundation Trustees announce strategic direction and further steps of their sustainability initiative

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Mar 08, 2021

On March 8, 2021, the International Accounting Standards Board (IASB) released a summary of the IFRS Foundation Trustees meeting held on March 2-4, where they continued their analysis and discussions of the feedback received to their consultation paper on sustainability reporting and concluded on the future strategic direction.

The feedback received on the first three questions that was discussed by the Trustees in February 2021 already indicated that there is a need for a global set of internationally recognised sustainability reporting standards and for the IFRS Foundation to play a role in the development of these standards.

Also in February 2021, the IOSCO Board issued a statement noting IOSCO's intention to work with the IFRS Foundation in developing a plan to establish a new board for setting sustainability reporting standards that meet the needs of the capital markets.

Based on the further discussion of the feedback to the consultation and encouraged by the IOSCO statement, the Trustees have now concluded on the strategic direction and further steps in their initiative.

The new Sustainability Standards Board (SSB) to be set up would

  • focus on information that is material to the decisions of investors, lenders and other creditors;
  • initially focus its efforts on climate-related reporting, while also working towards meeting the information needs of investors on other ESG matters;
  • build upon the well-established work of the Financial Stability Board’s Task Force on Climate related Financial Disclosures (TCFD), as well as work by the alliance of leading standard-setters in sustainability reporting focused on enterprise value; and
  • work with standard setters from key jurisdictions to issue standards that provide a globally consistent and comparable sustainability reporting baseline, while also providing flexibility for coordination on reporting requirements that capture wider sustainability impacts.

The Trustees also announced that they will consider the prototype climate-related financial disclosure standard published in December 2020 as a potential basis for the new board to develop climate-related reporting standards.

As regards further steps, the Trustees note that they

  • intend to publish a feedback statement that summarizes the responses received to their consultation paper, and how that feedback informed their decisions;
  • will publish for public comment the proposed changes to the Foundation’s constitution necessary to formalize establishment of a new board, including its composition; and
  • will continue to engage with the IFRS Foundation Monitoring Board regarding the proposed changes.

The Trustees underline that they remain on track to make a final determination about a new board in advance of the November 2021 United Nations COP26 conference.

Review the Trustees' full announcement on the IASB's website.

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