IFRS Foundation announces new group to develop sustainability reporting standards

Body will include IOSCO, TCFD, Value Reporting Foundation & CDSB

The Trustees of the IFRS Foundation have announced a new working group to accelerate convergence in global sustainability reporting standards and to look into a potential international sustainability reporting standards board. 

The working group will include: 

  • The International Organisation of Securities Commissions

  • The Taskforce on Climate Related Financial Disclosures 

  • The Value Reporting Foundation (the new entity formed as a result of the merger between the International Integrated Reporting Council and Sustainability Accounting Standards Board)

  • The Climate Disclosure Standards Board (CDSB), and 

  • The World Economic Forum’s International Business Council

The working group will engage closely with the Global Reporting Initiative (GRI) and CDP, it said, as well as welcoming engagement with jurisdictions that are working on sustainability reporting. 

Its upcoming work will include developing a prototype for climate-related reporting based on the TCFD recommendations, and reducing fragmentation in sustainability reporting standards. Its work will focus on reporting standards that use enterprise value.  

In reaction, CDSB Managing Director Mardi McBrien said: “The purpose of CDSB was not to exist forever, but to develop a framework that can be adopted by authoritative bodies like the IFRS Foundation. We look forward to collaborating with the other organisations on enterprise value creation in the working group.”

Paul Simpson, CEO of CDP said: “Helping CDSB develop over the last 15 years from such ambitious beginnings, we are proud to see that vision on the cusp of becoming a reality. CDSB has become a world leading organisation providing invaluable tools to the market to bring environmental reporting to financial standard setters. This is the next, and final, step in that process. At CDP we look forward to informing and supporting the IFRS process with our expertise on environmental disclosure and data”

Clara Barby will take partial leave from the Impact Management Project to be project lead for the IFRS Foundation’s sustainability project. 

The first meeting of the working group is expected to take place in April 2021. 

This is the latest in a long line of attempts to standardise ESG and impact reporting expectations globally, to promote comparable information for investors and companies, and to give regulators clarity on which standards should be adopted. 

Last week, the IFC – the private sector arm of the World Bank – partnered with the Global Impact Investing Network to launch “a set of high-level indicators that impact investors can use to measure and report on their investment activities”.