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IFRS Foundation consultation on amending its Constitution to establish an International Sustainability Standards Board (ISSB) [Completed]

Status:

On November 3, 2021, the IFRS Foundation announced the creation of its new International Sustainability Standards Board (ISSB) that will develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs

Last up­dated:

November 2021

Overview

On April 30, 2021, the Trustees of the IFRS Foundation proposed amendments to the IFRS Foundation Constitution that would enable the creation of a new sustainability standards board under the governance of the Foundation.

Proposed amendments to the Constitution

The Trustees proposed amendments that are a prerequisite for creating an International Sustainability Standards Board (ISSB) within the governance structure of the IFRS Foundation. These have regard to:

  • The objective of the IFRS Foundation.The objective of the IFRS Foundation would be amended to state that the IFRS Foundation has two standard setters: The International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB). Through the ISSB, the IFRS Foundation would "develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted sustainability standards based upon clearly articulated principles".
  • The governance of the ISSB and the IASB.The Trustees proposed that the Constitution is amended to stipulate that the Executive Director of the Foundation is appointed by the Trustees, in consultation with the chairs of the IASB and the ISSB. This proposed amendment would clarify reporting lines in an organization with two standard-setting boards.
  • The name of the new board and its standards.The Trustees proposed to name the new board the 'International Sustainability Standards Board (ISSB)'. The new board’s standards would be known as ‘IFRS sustainability standards’.
  • The composition of the ISSB.The new board would normally comprise 14 members. The members of the ISSB would appointed by the Trustees. A minority of ISSB members could be part-time members. The main qualifications for membership of the ISSB would be professional competence and relevant professional experience. The board would comprise three members from the Asia-Oceania region, three members from Europe, three members from the Americas, one member from Africa, and four members appointed from any area. The Chair would be chosen by the Trustees from among the full-time members as would a potential Vice-Chair be.

On November 3, 2021, at the 2021 United Na­tions COP26 con­fer­ence, the Trustees an­nounced the cre­ation of the new International Sustainability Standards Board.

As part of the an­nounce­ment the Trustees pub­lished a re­vised Con­sti­tu­tion and a Feed­back State­ment that re­sponds to the feed­back from Ex­po­sure Draft Pro­posed Tar­geted Amend­ments to the IFRS Foun­da­tion Con­sti­tu­tion to Ac­com­mo­date an In­ter­na­tional Sus­tain­abil­ity Stan­dards Board to Set IFRS Sus­tain­abil­ity Stan­dards.

The re­vised Con­sti­tu­tion pro­vides the frame­work for the for­ma­tion of the ISSB un­der the gov­er­nance struc­ture of the IFRS Foun­da­tion.

The Feed­back State­ment sets out the most im­por­tant mat­ters raised in re­sponse to the Ex­po­sure Draft and the Trustees’ views on those mat­ters.

 

Other de­vel­op­ments

November 3, 2021

On November 3, 2021, the IFRS Foundation announced the creation of its new International Sustainability Standards Board (ISSB) that will develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs.

July 2021

On July 23, 2021, the IASB staff updated the Work Plan to indicate that the Board plans to review the Exposure Draft feedback in October 2021.

April 2021

On April 30, 2021, the Trustees of the IFRS Foundation proposed amendments to the IFRS Foundation Constitution that would enable the creation of a new sustainability standards board under the governance of the Foundation.

 

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