Is there a path to global sustainability standards? An IFRS view

Posted on July 2, 2021 by Editor

Erkki Liikanen, Chair of the International Financial Reporting Standards (IFRS) Foundation Trustees, has shared his detailed insights on the way forward for sustainability reporting, and the Foundation’s progress in developing an International Sustainability Standards Board (ISSB) focused on enterprise value. These formed a keynote speech at CFA Institute’s Global Financial Regulatory Symposium on 29 June 2021.

Affirming the potential breadth and complexity of sustainability disclosures, he said: “The focus of IFRS is to meet the information needs of investors. There is a path to global sustainability standards if we, on the one hand, can create a global baseline of sustainability-related disclosures to facilitate comparability for investment decision making and, on the other, work with jurisdictions to ensure compatibility between this global baseline and their own initiatives.”

He drew a clear distinction between reporting that serves broad public policy objectives, the responsibility for which belongs to elected bodies, and disclosures specifically aimed at bringing transparency to global capital markets and enabling investors to assess sustainability risks and make informed decisions. It is here that the IFRS Foundation may play its role, following a recent review that found both demand for global standards and support for action by the Foundation.

“Our approach to global standards is market and demand led,” said Liikanen. “The Foundation provides a setting where investors, regulators, companies, academics and standard-setters from around the world can work and problem solve together,” following a transparent and inclusive due process.

The approach he discusses is often referred to as one of ‘building blocks,’ whereby a global standard provides international comparability for investors, and is also designed to be compatible with individual jurisdictions’ extra requirements. “To make this work will require political will, compromise and flexibility from all parties—including the IFRS Foundation. Success is by no means certain, but if you want global sustainability-related disclosures for investors, this offers a path.”

Read more here.

Other Posts


Would you like
to learn more?

Join our Newsletter mailing list to
stay plugged in to the latest
information about XBRL around the world.

By clicking submit you agree to the XBRL International privacy policy which can be found at xbrl.org/privacy