Mr. Liikanen began his speech with a strong statement:

There is a path to global sus­tain­abil­ity standards if we, on the one hand, can create a global baseline of sus­tain­abil­ity-re­lated dis­clo­sures to fa­cil­i­tate com­pa­ra­bil­ity for in­vest­ment decision making and, on the other, work with ju­ris­dic­tions to ensure com­pat­i­bil­ity between this global baseline and their own ini­tia­tives.

He then explained that while gov­ern­ments can establish policy frame­works, it is the investors that price in­vest­ment capital based on how those policies will impact companies in the long term. This in turn provides companies with an incentive to embrace sus­tain­able business models. Whether this process works smoothly depends on high-qual­ity, globally com­pa­ra­ble in­for­ma­tion on which investors can assess sus­tain­abil­ity risks and make informed decisions.

Mr. Liikanen then explained that this is the place where an in­vestor-fo­cused international stan­dard-set­ter such as the IFRS Foun­da­tion comes in.

Firstly, the IFRS Foun­da­tion's approach to global standards is market and demand led. The Foun­da­tion provides a setting where investors, reg­u­la­tors, companies, academics and stan­dard-set­ters from around the world can work and solve problems together. This work follows a trans­par­ent and inclusive due process that has evolved and proven valuable over time.

And secondly, the IFRS Foun­da­tion's ex­pe­ri­ence in international stan­dard-set­ting can help to overcome a situation where many ini­tia­tives attempt to improve com­pa­ra­bil­ity, but their numbers have led to greater diversity. The major players in the field, including the TCFD, the VRF and the CDSB, affirm that con­sol­i­da­tion is required and have welcomed the IFRS Foun­da­tion's proposals to establish a new International Sus­tain­abil­ity Standards Board within the gov­er­nance structure of the IFRS Foun­da­tion. Mr. Liikanen declared:

Our shared ambition is to introduce a global baseline of standards for sus­tain­abil­ity-re­lated dis­clo­sures which are focused on meeting the in­for­ma­tion needs of investors globally when assessing en­ter­prise value. En­ter­prise value is a key concept, designed to capture expected value creation for investors in the short, medium and long term, and is in­ter­de­pen­dent with value creation for society and the en­vi­ron­ment.

Mr. Liikanen then turned to the question of how ju­ris­dic­tional and international standards can be rec­on­ciled. He noted that the approach advocated by IOSCO and others is to establish a global baseline of sus­tain­abil­ity-re­lated dis­clo­sure standards to meet investor needs, which would be made available for use by ju­ris­dic­tions as a base for public policy needs. This approach would provide global com­pa­ra­bil­ity for investors in a way that allows ju­ris­dic­tions to combine the global standards with their own ad­di­tional re­quire­ments. He concluded his speech by stating:

To make this work will require political will, com­pro­mise and flex­i­bil­ity from all parties — including the IFRS Foun­da­tion. Success is by no means certain, but if you want global sus­tain­abil­ity-re­lated dis­clo­sures for investors, this offers a path.

For further information, refer to full text of Mr Liikanen's speech on the IASB website.