At COP26 yesterday, the IFRS Foundation announced: (i) the formation of a new International Sustainability Standards Board (ISSB); (ii) the planned consolidation of the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF) (was which recently formed by a merger of SASB and the Integrated Reporting Framework) into the ISSB by June 2022; and (iii) the release of prototype climate disclosure (see also this supplement) and general disclosure requirements for the ISSB’s consideration that were developed by a working group that includes the CDSB, International Accounting Standards Board, TCFD, VRF, and the World Economic Forum, with the support of IOSCO.
The ISSB FAQs address materiality in this fashion:
The overarching aim of the ISSB is to develop global thematic and industry-based sustainability disclosure standards that purportedly build on existing frameworks and guidance and that can be mandated by jurisdictions worldwide in conjunction with jurisdiction-specific requirements. The proposed standards will be phased (with climate being the first priority) and will be subject to public consultation.
See IFRS Foundation Trustees Chair Erkki Liikanen’s remarks at COP26; these releases from IOSCO and IFAC; these articles from Financial Management, Responsible Investor, ESG Today, and the WSJ; our prior report: “SASB and IIRC Merger Forms New “Value Reporting Foundation”; SEC Commissioner Hester Peirce’s statement and accompanying comment letter to the IFRS Foundation regarding its proposal to create the new ISSB, which we reported on here; and “US holds back on support for global sustainability standards” (Financial Times).
This post first appeared in the weekly Society Alert!