The International Sustainability Standards Board (ISSB) has this week announced standards for sustainability-related disclosure creating a global baseline approach for companies to report on climate-related risks.
One of the standards provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term.
Another sets out specific climate-related disclosures. Both aim to support companies in providing sustainability-related disclosure alongside their financial statements.
The inaugural standards have been compiled after 18 months and follow pressure from G20 leaders and other bodies across the business and investor community. The next phase of the initiative will see ISSB work with jurisdictions and companies to support their adoption.
“The ISSB Standards have been designed to help companies tell their sustainability story in a robust, comparable and verifiable manner. We have consulted closely with the market to ensure the standards are proportionate and will result in disclosures that are relevant for investment decision-making,” said ISSB Chair Emmanuel Faber.
The ISSB said it will continue to work with jurisdictions wishing to require incremental disclosures beyond the global baseline.
“Consistent and comparable sustainability information, paired with financial information, empowers investors and stakeholders to gain a comprehensive understanding of a company’s performance and their commitment to driving sustainable value creation,” commented Klaus Schwab, executive chairman of the World Economic Forum.
U.K. watchdog, the Financial Conduct Authority (FCA) said the standards “answer the clear market demand for complete, consistent, comparable and reliable corporate sustainability disclosures.”
“Including this information in annual financial reports will inform companies’ own decisions, and capital allocation by investors and lenders; feed data services; underpin instrument and product design; and steer corporate decision making,” it said.