It also responds to the 24 February statement by the International Organization of Securities Commissions (IOSCO), calling for the coordination of work to drive international consistency of sustainability-related disclosures with a focus on enterprise value creation.

Specifically, the working group will provide technical recommendations, including further development of the prototype built on the TCFD recommendations, as a potential basis for the new board to build on existing initiatives and develop standards for climate-related reporting and other sustainability topics. The group will also review how technical expertise and content might potentially be transitioned to the new board under the IFRS Foundation’s governance structure, with a view to facilitating consolidation and reducing fragmentation in sustainability reporting standards.

The working group will be chaired by the IFRS Foundation and include participation by the IASB, given the need for connectivity with financial reporting. IOSCO will participate in the group as an observer, given the essential role it would play in evaluating and endorsing standards issued by a new board. During this preparatory phase, the working group also welcomes engagement with jurisdictions that are working on sustainability reporting.

Participants in the working group are dedicated to reporting on enterprise value and bring together complementary international experience. The Financial Stability Board’s Task Force on Climate related Financial Disclosures (TCFD) brings recommendations for climate-related disclosures that promote more informed investment, credit and insurance underwriting decisions.

The Value Reporting Foundation brings international standard-setting experience. It represents the intended merger of the International Integrated Reporting Council (IIRC), which provides a framework for integrated reporting that connects financial and sustainability information, and the Sustainability Accounting Standards Board (SASB), which provides industry-specific standards for reporting on enterprise value.

These initiatives are joined by the Climate Disclosure Standards Board (CDSB), whose framework guides disclosure of material information for investors through the integration of climate, wider environmental and social-related information into financial reporting.

Finally, the World Economic Forum (WEF) will contribute their work on cross-industry metrics and disclosures that CEOs of a wide range of the world’s largest multinational companies have found to be important for disclosure. Throughout this process, the working group will also engage closely with the Global Reporting Initiative (GRI) and CDP.

The first meeting of the working group is expected to take place in April 2021, with updates on progress published on the IFRS Foundation website.

Compatibility with other initiatives

Consistent with the 8 March statement, as well as IOSCO’s recent press statement, the Trustees envisage that sustainability reporting standards issued by the new board would provide a global sustainability reporting baseline that would allow for greater comparability and consistency of application of the standards, while also providing flexibility for coordination on additional jurisdictional and multi-stakeholder reporting requirements (a 'building blocks' approach).

In this spirit, and in parallel to the working group, the Trustees will commence work with IOSCO and relevant organisations to explore the establishment of a multi-stakeholder expert consultative committee within the IFRS Foundation structure. The consultative committee would be tasked with formalising and streamlining the new board’s engagement with the relevant global stakeholders involved in sustainability reporting.

Project leadership

Clara Barby will take partial leave from the Impact Management Project (IMP) to be the project lead for the IFRS Foundation’s sustainability project, under the oversight and strategic direction of the IFRS Foundation’s Steering Committee of Trustees. This is complementary to her role as a facilitator for standard-setting organisations looking to achieve global convergence on sustainability reporting.