IOSCO Chair Ashley Alder believes we’re in sight of “a real step change” in sustainability reporting, writes Chris Hall at ESG Investor.
The IFRS Foundation’s climate-first approach to globally standardised sustainability reporting offers the most efficient path to decision-useful, corporate-level ESG information for institutional investors, according to Ashley Alder, Chair of IOSCO and CEO of Hong Kong’s Securities and Futures Commission (SFC).
And with a favourable following wind, the first fruits of the Foundation’s planned Sustainability Standards Board (SSB) – a mandatory global reporting standard for climate exposures – could be adopted and on the road to enforcement by securities regulators by this time next year.
“Without good corporate-level information, investors and asset management firms are operating with one hand tied behind their back in attempting to allocate capital across industries taking sustainability issues into account when the information is so disparate,” notes Alder.
Toward global convergence
Last month, the IFRS Foundation’s trustees confirmed the formation of a working group to undertake “technical preparation” for the creation of the proposed SSB, under the governance of the Foundation, meaning it would sit alongside the existing International Accounting Standards Board (IASB).
IOSCO, which formulates policy and sets standards for securities market regulation in 130 jurisdictions, was invited to join the working group as an advisor.
A key part of this preparation work is refining and approving the prototype climate-related disclosure standard published last December by the ‘group of five’, which builds on the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD). This collaborative effort by the existing sustainability standards-setting bodies was specifically designed to give the SSB a flying start.
“It is a very big change from the previous position, whereby there were lots of very good efforts across different standard setters,” says Alder. “This is a real step change. The degree of support is very strong. You can see it as the first very significant … [continues]
Read the full article on Regulation Asia’s sister publication, ESG Investor.