FSB collaborates with IOSCO to support ISSB roll out
In a recent letter addressed to G20 Finance Ministers and Central Bank Governors, the Financial Stability Board (FSB) notes that it is intensifying its efforts to address climate-related financial risks by working closely with the International Organization of Securities Commissions (IOSCO) to support the roll out of the International Sustainability Standards Board (ISSB) final standards. These standards will provide a global framework for sustainability disclosures, enabling companies worldwide to report on a common basis. The FSB acknowledges the progress made in all areas of its climate-related financial risks Roadmap, including data, disclosures, vulnerabilities analysis, and supervisory and regulatory approaches.
In addition to promoting the use of ISSB standards, the FSB is focusing on climate-related vulnerability analysis, supervisory and regulatory approaches, and the potential use of corporate transition plans to assess risks. However, the report also highlights the need for further development of the climate data landscape, including accuracy, consistency, and quality, to facilitate forward-looking climate risk assessments. The FSB aims to embed climate scenario analysis in financial vulnerability monitoring and enhance understanding of cross-border and cross-sectoral transmission of climate shocks.
As the FSB presents an updated Roadmap to the G20, it emphasises the progress made in climate-related work and the ongoing initiatives. The FSB’s collaboration with IOSCO and other relevant bodies demonstrates a collective commitment to advancing sustainability reporting and strengthening the analysis and monitoring of climate-related vulnerabilities in the global financial system.
Naturally, we would add that regulators and standards setters now need to focus on taxonomy interoperability. This is to ensure that the “digital first” approach that policy makers are driving towards can give rise in practice to data requirements that keep burden low for companies and increase the value, comparability and utility of resulting Inline XBRL reports that are available for users to consume.
Read the report here.