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Given this demand, the Trustees have agreed to undertake further detailed analysis of feedback on the requirements for success and other conditions to be satisfied before considering whether to establish a new board. The Trustees agreed to the formation of a Trustee Steering Committee to oversee the next phases of work and also added an additional key requirement for success— the need for urgency to deliver global standards, most notably on climate.
“The pressing need for standardisation of sustainability reporting is no surprise – as an organisation that has been filling the gap in the absence of IFRS action we experience the demand for consistent, comparable, decision-useful information first-hand on a daily basis. We welcome the move towards the possible creation of a Sustainability Standards Board. The IFRS Foundation has an important part to play to contribute to a globally standardised sustainability reporting landscape on corporate value creation.” said CDSB Managing Director Mardi McBrien, adding that “We stand ready to support the IFRS Foundation in any way we can.”
Ravi Abeywardana, CDSB Technical Director said: “Time is no longer on the IFRS Foundation’s side and the need for reporting material nature- related and social issues is essential for investors to have the information they need to allocate for a sustainable future”.
CDSB’s work has been filling an essential gap in the market and creating the enabling conditions to support the direction of IFRS travel since 2007. CDSB is undertaking a public consultation on its application guidance to the CDSB Framework on water-related financial disclosures, with biodiversity/land use/forests and social issues starting this year, expanding the TCFD’s approach to natural capital.
In December 2020, the largest Global sustainability and integrated reporting organisations launched a prototype climate-related financial disclosure standard, outlining a shared vision for a comprehensive corporate reporting system. The paper demonstrates that standard-setting for sustainability-related financial disclosure is a natural extension of the IFRS Foundation’s current role and provides insight into how such an ambition can be achieved. It also offers this content in the form of prototypes so that it can serve as a running start for any standards development that the IFRS Foundation might choose to undertake.
The IFRS Trustees will be meeting next on 2-4 March 2021. Given the growing and urgent demand, the intention would be for the Trustees to produce a definitive proposal (including a road map with timeline) by the end of September 2021, and possibly leading to an announcement on the establishment of a sustainability standards board at the meeting of the United Nations Climate Change Conference COP26 in November 2021.