The march toward establishing reliable and comparable standards for sustainability reporting took a huge step forward with the IFRS Foundation’s highly anticipated announcement that it is creating a new International Sustainability Standards Board (ISSB).
The IFRS Foundation told the COP 26 conference in Glasgow that it had formally established the International Sustainability Standards Board, which has been created to meet the demand for global rules for non-financial reporting.
In response to overwhelming demand for global sustainability standards, they are setting out their plans:
First, the formation of the International Sustainability Standards Board, or ISSB. Its purpose is to develop, in the public interest, a comprehensive global baseline of sustainability disclosures for the financial markets, IFRS Sustainability Disclosure Standards. This is what the G20, IOSCO, and many others asked for. The ISSB will sit within the IFRS Foundation, alongside the IASB, and will work closely with it.
Second, a commitment to consolidate two investor-focused international sustainability standard-setters into the ISSB. The Value Reporting Foundation (VRF), which is home to SASB Standards and Integrated Reporting, and the Climate Disclosure Standards Board (CDSB) will become part of the IFRS family.
Third, the publication of two prototypes: one on climate-related disclosures and the other on general sustainability disclosure requirements. This is the outcome of the work by the Taskforce for Climate-related Disclosures, the VRF, the CDSB, the World Economic Forum, and the IASB, supported
All these actions together create the necessary institutional arrangements for a global sustainability disclosure standard-setter for the financial markets.