In order to achieve the goal of a more sustainable, inclusive, and prosperous economy and society, IFAC describes four areas the G20 should focus on:

1. Accelerate sustainability and inclusiveness
2. Recommit to global collaboration
3. Resist regulatory fragmentation
4. Focus on public sector transparency and integrity

IFAC comments that delivering on these will take a concerted effort from policymakers, businesses, other organisations, investors and individuals.

IFAC believes these priorities require two actions to be taken urgently:

• Support the IFRS Foundation initiative on sustainability standards and
• Champion public financial management.

On the first point, the press release states:

Momentum is growing around developing a global baseline of sustainability standards, with the IFRS Foundation poised to deliver. IFAC strongly supports this crucial work.

Please click to access the Call to Action on the IFAC website.

The topics for discussion are:

• IFRS 17 – Project plan update
• IFRS 17 – Technical paper: with-profits inherited estates
• IFRS 17 – Technical paper: annual cohorts
• IFRS 17 – Technical paper: CSM allocation
• IFRS 17 – Technical paper: other significant issues
• Endorsement of 2020 Narrow Scope Amendments – Approve draft endorsement criteria assessment (DECA)
• Rate-Regulated Activities – Approve feedback statement
• IASB Agenda Consultation – Approve final comment letter and feedback statement  
• IFRS 17 Narrow Scope Amendment – Approval final comment letter
• Disclosure Requirements in IFRS Standards – A Pilot Approach - Updated project implementation plan 
• Lack of Exchangeability Feedback Statement

The meeting, agenda papers and details of how to register are available on the UKEB website.  A recording of the meeting is available on the UKEB website.

In order to support public discussion on this topic, the IVSC is publishing a multi-part article series exploring certain fundamental questions in this area. the first part The Case for Realigning Reporting Standards with Modern Value Creation can now be accessed through the press release on the IVSC website.

The first webinar will be co-hosted with the Confederation of Danish Industry and FSR — Danish Auditors and will discuss both exposure drafts. This event will take place on 5 October 2021.

The second webinar will be co-hosted with the Accounting Standards Committee of Germany and will focus on the amendments in the ED ‘Dis­clo­sure Re­quire­ments in IFRS Standards — A Pilot Approach’. This event will take place on 7 October 2021.

For more in­for­ma­tion, see the press release on the EFRAG’s website.

Climate change is an undiversifiable risk, which requires an immediate and urgent response.  We strongly support the UK government’s goal of achieving transparency in business reporting on climate-related issues across the UK economy.  We agree that there is an important opportunity for the UK to establish a pathway towards mandatory reporting around the world via the 26th UN Climate Change Conference of the Parties (COP26). We therefore welcome the CP and, consistent with our response to the FCA’s previous consultation paper CP20/3, support the extension of the requirement to report in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to standard-listed issuers with some exceptions.

Deloitte Touche Tohmatsu Limited’s (DTTL’s) Global CEO, Chairman and CFO are signatories to the statement of support for the Task Force on Climate-related Financial Disclosures (TCFD) and DTTL is actively involved in its work through our colleague Catherine Saire, a member of the TCFD. TCFD is market-driven and investor-focused and is recognised as an appropriate framework by the International Organization of Securities Commissions (IOSCO) globally and by the European Securities and Markets Authority (ESMA) in the EU.  It is not itself a standard, but it is a positive step towards a comprehensive global system.  Progress, including on standards covering climate, is accelerating, as shown by the recent steps taken by IOSCO and the IFRS Foundation, and we fully support and encourage the development of global sustainability standards which will enhance global comparability and consistency.  We appreciate that the proposals in this consultation represent an interim measure until such a standard is published and encourage the FCA – and the UK government more widely - to adopt and align with any such standard as soon as practicable and do all that it can to encourage its adoption by jurisdictions around the world to promote consistent and comparable disclosures.

More broadly, corporate reporting is part of a wider system of transparency that enhances confidence in capital markets and promotes efficient allocation of capital to long-term resilient business.  This therefore includes enhancing confidence in information provided in Green bond prospectuses, and on the use of proceeds of a bond or ESG data and ratings.  These are innovative, fast moving markets in their early stages.  However, investors and other capital markets participants increasingly rely on this information in their decision-making, in particular when assessing long-term, risk-adjusted returns.  Therefore, it is essential to promote trust, transparency, and confidence in the interests of flows of high-quality information relevant to investor needs.  As a result, we welcome moves by the FCA that will drive the transparency, understandability and comparability of information given to investors so they can make informed decisions.

We believe that a foundation of a system of high-quality ESG information is the adoption of global sustainability standards that lead to corporates reporting consistent and comparable ESG information.  This helps to create a baseline layer of high-quality, company-reported information which the rest of the eco-system can rely on to support more efficient markets and more effective decision-making.  We therefore believe this adds to the case for swift and decisive action to bring about global sustainability standards.

We also acknowledge that over time, further measures will be important by way of monitoring and oversight of ESG information and providers. However, we think that this should be balanced against the need to continue to encourage innovation and market developments in a fast-changing market and to meet the evolving needs of retail and institutional investors.  Innovation encourages competition and choice for consumers of these products.  If those customers are well informed, then the market can be an aid in supplying the right products for their needs at the right price. Regulation should not be about eliminating risk from the market, so long as customers are fully aware of the risk they are taking on when making their purchasing decisions.  We therefore think that balanced regulation and voluntary guidance can be useful tools at this stage of the development of the market.

Finally, we strongly encourage the FCA to finalise and publish the outcome of this consultation as soon as practicable, ideally in advance of COP26, which takes place from 1 November 2021, to send the right message to the rest of the world about the UK’s commitment to embracing climate-related disclosures.

Click to view the full comment letter below.

Climate change is a systemic and existential risk, which requires an immediate and urgent response.  We strongly support the UK government’s goal of achieving transparency in business reporting on climate-related issues across the UK economy.  We agree that there is an important opportunity for the UK to establish a pathway towards mandatory reporting around the world via the UK’s G7 Presidency and the 26th UN Climate Change Conference of the Parties (COP26).  We therefore welcome the CP and, consistent with our response to the FCA’s previous consultation paper CP20/3 and linked current consultation paper CP21/18, support the extension of the requirement to report consistently with the Recommendations and Recommended Disclosures of the Task Force on Climate-related Financial Disclosures (TCFD).  We see this as an opportunity for the FCA to take the lead on improving data flow and capital allocation in the investment chain, and to align with other reporting and disclosure requirements.  Done right, the regulatory package will improve the transparency of firms’ commitments at both a corporate and product level, as well as the veracity of any claims made.

Deloitte Touche Tohmatsu Limited’s (DTTL’s) Global CEO, Chairman and CFO are signatories to the statement of support for the TCFD and DTTL is actively involved in its work through Catherine Saire, a member of the TCFD.  TCFD is market-driven and investor-focused and is recognised as an appropriate framework by the International Organization of Securities Commissions (IOSCO) globally and by the European Securities and Markets Authority (ESMA) in the EU.  TCFD is not itself a reporting standard per se but is a positive step towards a comprehensive global system.  Progress, including on standards covering climate, is accelerating, as shown by the recent steps taken by IOSCO and the IFRS Foundation, and we fully support and encourage the development of global sustainability standards which will enhance global comparability and consistency.  We appreciate that the proposals in this consultation represent an interim measure until such a standard is published and encourage the FCA – and the UK government more widely - to adopt and align with any such standard as soon as practicable, and to do all that it can to encourage adoption by jurisdictions around the world, in order to promote consistent and comparable disclosures.

Furthermore, we strongly encourage the FCA to finalise and publish the outcome of this consultation as soon as practicable, ideally in advance of COP26, to give organisations clarity on the regulatory expectations ahead of the proposed implementation date of 1 January 2022.

Click to view the full comment letter.

The proposed new standard is intended to replace IFRS 14 Regulatory Deferral Accounts.

EFRAG supports the overall objective of the ED but has identified a number of concerns with the proposals which it suggests that the IASB should address before finalising the proposed Standard:

• ​​Whilst EFRAG considers that there is clarity on the scope of the proposed standard within the utilities sector, it considers that there is less clarity for other sectors.  EFRAG highlights that there is a need for further clarification on entities' scope eligibility and recommends that the IASB consider specific scope exclusions.
• EFRAG notes some instances where the recognised regulatory assets and regulatory liabilities might not meet the definitions provided in the ED.
• EFRAG disagrees with paragraph B15 of the ED and recommends that the accounting regulatory returns earned on assets not yet available for use should depend on the economic substance of the regulatory agreement. 
• EFRAG is aware of situations where the proposed requirements on total allowed compensation under paragraphs B3-B9 related to allowable expenses will not reflect the economic substance of the regulatory agreement and recommends that the IASB further analyses whether the requirements in those paragraphs can be applied across diverse regulatory regimes.
• EFRAG generally supports the proposed recognition criteria but highlights concerns of its stakeholders regarding high levels of uncertainty and indicates that such stakeholders recommend that the IASB considers a higher recognition threshold for cases of high existence uncertainty.
• EFRAG supports the proposed cash-flow measurement technique, but disagrees with the proposed new concept of a minimum adequate rate as the discount rate for regulatory assets, when the regulatory interest rate provided is insufficient. EFRAG also disagrees with having different discounting approaches for regulatory assets and regulatory liabilities.
• ​Whilst EFRAG generally agrees with proposed overall disclosure objective and the proposals for presenting regulatory income and regulatory expense, it recommends that the IASB focus more on the usefulness of the information provided and adopt a more balanced disclosure approach.
• EFRAG recommends modified retrospective application with exemptions or practical expedients for assets with long useful lives and where backdated CWIP regulatory returns will need to be deferred (should the IASB decide to retain ​this proposal).
• EFRAG recommends that the effective date should be 24-36 months after the publication of the final standard to allow effective implementation.
• ​EFRAG recommends the formation of a transition resource group to help with the  implementation of the proposed Standard.

The press release and the final comment letter are available at the EFRAG website.

The ITCG will discuss the following topics:

• Review of common reporting practice
• Digital reporting implications for the Exposure Draft Management Commentary
• Technology update

The agenda papers for this meeting are available on the IASB website.

The Board will discuss the following:

• Board work plan update
• Goodwill and impairment
• Post implementation review of IFRS 9
• Primary financial statements
• Dynamic risk management
• Extractive activities
• Financial instruments with characteristics of equity

The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries, as well as observer notes from the meeting on this page as they become available.

EFRAG is looking for a holistic assessment of IFRSs (strengths, weaknesses, long-term considerations, topics still to be addressed and European needs and requirements). Applications are welcome by 15 October 2021.

Please click for more information on the EFRAG website.