The International Organisation of Securities Commissions (IOSCO) has endorsed the International Sustainability Standards Board’s (ISSB) standards, International Financial Reporting Standards (IFRS) S1 and S2 – following a comprehensive review.
IOSCO said it has engaged extensively with the ISSB over the past two years, culminating in a comprehensive and independent review of the final ISSB standards, the organisation stated.
After a detailed analysis, IOSCO has determined that the ISSB standards are appropriate to serve as a global framework for capital markets to develop the use of sustainability-related financial information in both capital raising and trading and for helping globally integrated financial markets accurately assess relevant sustainability risks and opportunities.
IOSCO is calling on its 130 member jurisdictions, which regulate more than 95% of the world’s financial markets, to consider ways in which they might adopt, apply or otherwise be informed by the ISSB standards.
This should be within the context of their jurisdictional arrangements to promote consistent and comparable climate-related and other sustainability-related disclosures for investors.
“It’s an important day for financial markets across the world as we are one step closer to reaching the milestone of having a real global framework all around the world that will allow market participants to assess and compare sustainability– related risk and opportunity,” said Jean-Paul Servais, Chairman of the IOSCO Board.
He added, “The adoption process won’t be the same for every country, as different scopes, national preferences, and market specificities will come into play,”
He noted that IOSCO’s endorsement sends a strong signal to jurisdictions around the world that the ISSB Standards are “fit for purpose” for capital market use, enabling pricing in of sustainability-related risks and opportunities.
The ISSB was established in November 2021 to deliver a global baseline of sustainability-related disclosure for global capital markets.
To coincide with the endorsement, the IFRS Foundation has published a high-level roadmap providing transparency around the IFRS Foundation and the ISSB’s strategy to support jurisdictional adoption. The document is a precursor to an Adoption Guide for regulators, which will be finalised later in 2023.
Emmanuel Faber, ISSB chair said: “Widespread regulatory adoption of a global baseline of sustainability-related disclosures through the ISSB standards will secure the consistency and comparability of information that capital markets demand.
IOSCO’s timely endorsement and strong encouragement for capital market authorities to act confirms that the ISSB standards are fit for purpose.”
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