Chair of the Trustees speaks at IFRS Foundation Conference
23 Jun 2022
Erkki Liikanen, Chair of the IFRS Foundation Trustees, spoke at the IFRS Foundation Conference, which is split into one sustainability day and one accounting day, about the IASB and the ISSB.
His speech was mainly devoted to drawing a parallel between establishing the International Accounting Standards Board (IASB) in 2001 and the International Sustainability Standards Board (ISSB) now.
He began by pointing out that when the IASB was established, there were significant challenges with financial accounting regarding transparency and comparability across borders. There were calls (not least by the G7) for internationally agreed accounting standards. There were also calls for the International Organization of Securities Commissions (IOSCO) to review the standards. IOSCO did so and also recommended that its members permitted the use of the international standards for companies listed on foreign stock exchanges. In the end, as Mr Liikanen pointed out, the international accounting standards proved to be a great success. He summarised:
And we have seen the benefits of this throughout the economic system. It benefits investors because it provides the information they need to make informed capital allocation decisions. It helps companies because they have clarity on which rules to follow in preparing their financial statements. And, it supports regulators in achieving their objectives of facilitating capital flows.
Mr Liikanen then turned to the creation of the ISSB. Again, he pointed out, the IFRS Foundation was responding to great demand — from investors, companies, IOSCO and jurisdictions. And again, IOSCO has agreed to review the standards to be issued by the ISSB. And the hope is that then IOSCO will once more encourage the adoption of the new IFRS Sustainability Disclosure Standards — to make them as much of a success as their accounting counterparts. Mr Liikanen concluded:
IOSCO brings together the world’s securities regulators. It plays an incredibly important role in promoting international standards. [...] Endorsement by IOSCO would be a real catalyst for the uptake of IFRS Sustainability Disclosure Standards around the world.
Please click to access the full text of the speech on the IFRS Foundation website.