G20 Watchdogs Request Climate Standard Setters to Avoid Inconsistent Disclosures

G20 Watchdogs Request Climate Standard Setters to Avoid Inconsistent Disclosures

BY  
Seneca ESG  
- October 13, 2022

The G20’s Financial Stability Board (FSB) has called on climate standard setters to speed up work so as to avoid differences between their finalized climate disclosure rules for companies, which could cause the fragmentation of markets, as reported by Reuters on October 11. According to Klaas Knot, the Dutch central bank president and FSB Chairman, interoperability between the common global benchmark and national and regional jurisdiction-specific requirements will be essential, as unified disclosure standards could avoid harmful fragmentation in markets so that investors could easily compare companies from across the world. The FSB also called for further efforts to achieve interoperability between jurisdictions, as they have disparities in approaches and pace of progress.

The International Sustainability Standards Board (ISSB), which is committed to creating a comprehensive global baseline for sustainability disclosures, is set to roll out a set of global “baseline” norms by early 2023 for use in various jurisdictions. In March 2022, the US Securities and Exchange Commission (SEC) proposed new rules requiring listed companies to submit detailed reports about their climate-related risks, emissions, and net-zero transition plans. The EU, the UK, New Zealand, Japan, and Hong Kong are also working on similar measures. For instance, Japan’s Financial Services Agency (FSA) has required around 4,000 large enterprises to report their greenhouse gas emissions and make climate-related disclosures based on the TCFD rules starting from April 2022. Other Asian bourses, such as Hong Kong Exchanges and Clearing (HKEX) and Singapore Exchange (SGX) , also published similar climate disclosure rules last year. 

Sources:

https://www.reuters.com/business/sustainable-business/g20-watchdog-tells-climate-standard-setters-not-hardwire-differences-2022-10-11/

https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/understanding-the-secs-proposed-climate-risk-disclosure-rule

https://asia.nikkei.com/Spotlight/Environment/Climate-Change/Japan-to-require-4-000-companies-to-disclose-climate-risks

https://www.hkex.com.hk/News/Regulatory-Announcements/2021/211105news?sc_lang=en

https://www.reuters.com/business/sustainable-business/singapore-exchange-mandates-climate-board-diversity-disclosures-2021-12-15/

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