The IAIS comment letters to ... the ISSB (Consultation on Agenda Priorities)

24 August 2023

IAIS welcomes the opportunity to comment on the ISSB Agenda priorities and the comment letter to the ISSB provides suggestions on areas where the ISSB can prioritise its work.

...Reference can also be made to the final report on bridging data gaps as issued by the Network for Greening the Financial System (NGFS), which discusses the rationale for regulatory climate disclosures as well as the need to draw linkages between financial and non-financial risk reporting.
The ISSB should support consistent implementation of IFRS S1 and IFRS S2
As insurance supervisors, the majority of IAIS members are not in charge of enforcing general sustainability-related disclosure requirements. However, part of their mandates is to ensure financial stability by closely monitoring the exposure of jurisdictional financial institutions to sustainability risks to assess potential implications for the financial system.
Therefore, the IAIS’ main area of focus remains the successful implementation of high-quality disclosures on climate-related risks as climate-related risks are a significant source of financial risk. In that regard, the IAIS agrees that the primary focus of the ISSB should be to support the consistent implementation of IFRS S1 and IFRS S2 and to expand the requirements, in particular to strengthen the required metrics.
As regards the other projects, and acknowledging the fact that the time horizon of the agenda consultation is limited to 2024-2025, the IAIS suggests that the ISSB potentially also focus on the research project on biodiversity. In this respect, in March 2022, the NGFS issued a report highlighting that biodiversity loss may trigger significant financial losses for businesses through transmission channels similar to climate-related risks. In addition, the ISSB may build on previous work undertaken by the Task Force on nature-related financial disclosures. Finally, such a project could also benefit from the work undertaken by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. The IAIS also notes an interest in a research project on human capital, which could have implications for insurers' culture, governance and conduct of business...

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