August 17, 2022
Business and Finance community respond to the proposed IFRS sustainability disclosure standards

Statements of support for the proposed IFRS Sustainability Disclosure Standards have been signed by several leading global figures, including 86 Chief Financial Officers and institutional investors representing more than £620 billion in assets. The statements welcome the role of the IFRS and the suggestions, but additionally ask them to revisit as well as further enhance some requirements for when the final standards are announced.

The CFO signatories, following on from their background in financial reporting and sustainability-related disclosures, have released six key areas for the ISSB to concentrate on in order to achieve effective sustainability reporting standards, including, further alignment, think about dynamic materiality, and, review a broader set of environmental, social and economic factors. This group of CFOs represents organizations from Asia Pacific, Europe, North and South America, signalling a broad consensus for globally-aligned sustainability standards.

 “Businesses and investors need transparency and consistency to be able to invest in a sustainable future. The adoption of a common set of sustainability standards is pivotal in meeting these needs and no one is better positioned than the ISSB to play this role globally. Time is running out and the business and finance community need to meet the moment. Let’s seize this opportunity to achieve global alignment through the proposed ISSB standards so that companies and investors can focus on action.” George Quinn, Group Chief Financial Officer, Zurich Insurance Group

Investors need decision-useful data

For investors, disclosures of vigourous, comparable and decision-useful information is paramount to assess both an entity’s functioning and impact, supporting the allocation of capital required to achieve a sustainable global economy. Institutional investors, including chairs of pension schemes, have therefore supported a high-level response to the proposed IFRS Sustainability Disclosure Standards. The response welcomes the role of the ISSB and the call for global alignment.

“As the International Sustainability Standards Board (ISSB) develops global standards on sustainability-related financial disclosures, we – as investors – have a significant and unique opportunity to signal to the global market what data needs we really have for investment decisions. Understanding the impact, the entity’s activities has on wider society is just as important as understanding the risks and opportunities affecting the entity’s enterprise value. As users of sustainability data, we must ask the ISSB to enhance the proposed global standards and deliver a watershed moment on decision-useful, sustainability data.” Russell Picot, Chair, HSBC Bank (UK) Pension Trust and Co-Chair, A4S Asset Owners Network

Reporting is a means to an end

For organizations, sustainability factors can present both risks and opportunities, however, without the proper information neither businesses nor investors will be able to make fully informed decisions.

Attention is paid in enabling action when determining what disclosures are required. Reporting is a means to an end, not an end in itself.

Companies that operate over different jurisdictions spend valuable resources reconciling reporting requirements across multiple standards. Resources that should be focused on action.

“Reporting is not an end in itself. Global alignment on sustainability disclosure standards are needed so that organizations can focus on action, rather than reconciling the ‘alphabet soup’ of requirements across jurisdictions. This is why the ISSB and other standard setters need to listen to the call from CFOs and investors to establish a common set of global standards which will provide the information needed to deliver ambitious targets and action.” Jessica Fries, Executive Chair, A4S

Read the statements and signatories here

Source: A4S