A group of institutional investors representing over £620bn of assets under management, including HSBC, Aviva, TFL, Tesco and BT, has written to the International Sustainability Standards Board (ISSB) warning that its proposed global sustainability disclosure standards will fail to meet their needs.
The group – A4S Asset Owners Network – is calling for ISSB to strengthen inclusion of factors beyond those narrowly impacting enterprise value.
In a statement the group specifically commented on the ISSB’s current drafts stating that ‘users’ use sustainability-related data to assess enterprise value and “make decisions on whether to provide resources to the entity.”
“The investors feel that relying wholly on enterprise value does not give the full picture and does not address users’ needs, as 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,” it said.
The ISSB, whose consultation closed on 29 July, said it has received more than 1,300 comment letters on its two drafts – climate disclosure and general requirements disclosure standards.
During the 120-day comment period, ISSB representatives participated in more than 400 outreach events, engaging with thousands of stakeholders globally.
The aim of the ISSB is to unify disclosures from corporates, helping investors and other stakeholders to properly compare their sustainability performance and related risks.
Currently, there is a patchwork of various voluntary disclosure guidelines which has made meaningful comparisons of corporate environmental credentials complicated.
The standards build upon the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and incorporate industry-based disclosure requirements drawn up by the Sustainability Accounting Standards Board (SASB).
“I am encouraged by the number of comments we have received on our proposals, ” said Emmanuel Faber, chair of the ISSB.
He added, “Global solutions require collective action, and the feedback we have received provides a critical grounding on which to build sustainability disclosure standards that provide a global baseline for the capital markets.
