The IFRS Foundation launched the new International Sustainability Standards Board (ISSB) to develop a comprehensive global baseline of high-quality sustainability disclosure standards for investors’ information needs, according to the IFRS Foundation’s website on November 3. The ISSB will develop IFRS Sustainability Disclosure Standards, including disclosure requirements that address companies’ impacts on sustainability matters relevant to assessing enterprise value and making investment decisions. In addition, the Foundation also published prototype climate and general disclosure requirements based on contributions from the Climate Disclosure Standards Board (CDSB), the International Accounting Standards Board (IASB), the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), the Value Reporting Foundation (VRF), and the World Economic Forum (WEF). The prototype climate and general disclosure requirements consolidated key aspects of these organizations’ content into an enhanced, unified set of recommendations to be considered by the ISSB.
In the same announcement, the IFRS Foundation also announced a consolidation of CDSB and VRF on November 3 at COP26. The CDSB is a framework for reporting environmental and climate change information for corporates and national governments, founded by the nonprofit CDP. The VRF houses the Integrated Reporting Framework and SASB Standards, two of the most globally recognized ESG reporting standards. The IFRS Foundation noted that many investors and regulators have called for globally comparable sustainability financial reporting and look to IFRS’s expertise for creating such an initiative. The consolidation of CDSB and VRF signifies an important step to streamline and formalize corporate sustainability disclosures and build the foundation for a global sustainability disclosure standard for the financial markets.