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FSB roadmap for addressing climate-related financial risks

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08 Jul 2021

The Financial Stability Board (FSB) has submitted to the G20 Finance Ministers and Central Bank Governors for endorsement a comprehensive roadmap to address climate-related financial risks. The roadmap outlines the work underway and still to be done by standard-setting bodies and other international organisations over a multi-year period.

The roadmap, which is accompanied by several document, including a report on promoting climate-related disclosures, notes that the goal of international initiatives in the area of financial disclosures must be to achieve globally consistent, comparable, and decision-useful public disclosures by firms of their climate-related financial risks. To further this overall goal, establishing international standards is important, including accommodating interoperability between a global baseline of international standards and national and regional jurisdiction-specific requirements. Therefore, the FSB welcomes the IFRS Foundation’s programme of work to develop a baseline global sustainability reporting standard under robust governance and public oversight, built from the TCFD framework and the work of an alliance of sustainability standard-setters, involving them and a wider range of stakeholders closely, including national and regional authorities.

The FSB surveyed its members in the first half of 2021 to explore national/regional practices (current or planned) of financial authorities on promoting climate-related disclosures. The survey responses indicated that most jurisdictions strongly support the development of a common global baseline of international reporting standards on climate, with many referencing the ongoing work of the IFRS Foundation. They also signalled that international coordination on requirements to climate-related disclosures is critical and that regulatory and supervisory fragmentation must be prevented.

The roadmap notes that the FSB can play an important role in global coordination, including promoting adoption of the anticipated international reporting standards developed by the ISSB, once developed and if endorsed, as a global baseline. Such internationally agreed standards for disclosures as a global baseline would not preclude authorities from going further or at a faster pace in their jurisdictions. The FSB states that it will continue to act as an international forum for sharing experiences across jurisdictions, promoting best practices, and contribute to discussions in other international fora (such as through COP26 and G7 / G20 meetings) and will continue to support the IFRS Foundation’s work to develop a proposal for a baseline global sustainability reporting standard under robust governance and public oversight. As part of this work, the FSB encourages the IFRS Foundation to address the connectivity between proposed sustainability reporting standards to be developed by the ISSB and existing financial accounting standards. Conditional on the endorsement of this standard, the FSB will encourage FSB member jurisdictions to consider the ISSB’s standard for use for cross-border purposes and when setting sustainability-related disclosure requirements, within the context of individual jurisdictions’ regulatory and legal requirements and in a way that promotes consistent and comparable sustainability disclosures across jurisdictions.

The actions and deliverables are described in detail in the roadmap with an indicative timeline for each of these actions and deliverables provided in tabular format on page 12 of the document. Please click for the following additional information on the FSB website:

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