After an introductory assessment of the current situation, which stresses the growing and urgent demand and the need for consistency in reporting and comparable information, the consultation paper sets out high-level options for the IFRS Foundation. These options are explained as maintaining the status quo, facilitating existing initiatives, or creating a Sustainability Standards Board (SSB) and becoming a standard-setter working with existing initiatives and building upon their work.

For establishing the possible new sustainability standards board the existing IFRS Foundation’s three-tier governance structure could be leveraged. The new board could operate alongside the International Accounting Standards Board (IASB) under the existing governance structure, build on existing developments and collaborate with other bodies and initiatives in sustainability, focusing initially on climate-related matters. However, the consultation paper sets out critical success factors for the creation of an SSB. These include:

• Achieving sufficient support from public authorities and market participants;
• working with regional initiatives to achieve global consistency and reduce complexity in the reporting landscape;
• achieving the appropriate level of funding; and
• ensuring the current mission of the IFRS Foundation is not compromised.

If respondents believe that the SSB could and should be established by the IFRS Foundation, the discussion paper suggests a ‘climate-first’ approach, proposes that the SSB would initially focus its efforts on the sustainability information most relevant to investors and other market participants and could consider how to broaden its scope as it proceeds with its work, and and discusses assurance aspects.

The consultation paper includes ten questions to respondents and encourages stakeholders to raise any other comment or relevant matters for the consideration of the Trustees. Comments on the consultation are requested by 31 December 2020.

Please click for the following additional information:

• Press release
• Consultation paper
• Need to know — Ground-breaking proposal from IFRS Foundation points to global standards for sustainability reporting

In addition, the CDP, Climate Disclosure Standards Board, Global Reporting Initiative, International Integrated Reporting Council and Sustainability Accounting Standards Board have issued an open letter to Erik Thedéen, Chair of the Sustainable Finance Task Force of the International Organization of Securities Commissions, on the need to work together to meet the needs of the capital markets.  Mr. Thedéen acknowledged the letter and the IFRS Foundation consultation in a speech stating that: "While these initiatives are currently running in parallel, I expect them to come together."

IFAC has issued a press release, applauding both, the IFRS Foundation consultation and the open letter.