IOSCO sees “urgent need” for sustainability standards
The International Organization of Securities Commissions (IOSCO) has made a forceful statement in support of global sustainability reporting standards and collaboration. Following a meeting of IOSCO’s Sustainable Finance Task Force (STF), the organisation laid out its approach, based on what it sees as an “urgent need for globally consistent, comparable, and reliable sustainability disclosure standards,” and announced its priorities and vision for a Sustainability Standards Board (SSB) under the International Financial Reporting Standards (IFRS) Foundation.
In IOSCO’s view there is a need for comparable sustainability-related information for use by investors which is not currently being met, with companies reporting selectively and referencing different frameworks. It has identified three priority areas for improvement: encouraging globally consistent standards; promoting comparable, industry-specific metrics and narratives; and coordinating approaches to integration of sustainability reporting into existing accounting frameworks.
To this end, IOSCO has emphasised its commitment to working with the IFRS Foundation, with a focus on establishing the SSB with a strong governance foundation. It encourages the SSB to build on existing efforts, leveraging current reporting frameworks, and welcomes the alliance of leading organisations.
“There is an urgent demand to improve sustainability reporting in a way that meets market needs,” says Ashley Alder, IOSCO Chair and CEO of the Hong Kong Securities and Futures Commission. “I believe that IOSCO is in a unique position to underpin market acceptance of high-quality sustainability disclosure standards by endorsing the system architecture for sustainability standard setting under the IFRS Foundation – just as we did 20 years ago when we endorsed IFRS financial reporting standards.”