The International Sustainability Standards Board (ISSB) has launched a new global ‘Partnership Framework’ in an attempt to edge closer to the global implementation of climate-related disclosure standards.
The ISSB said the framework aims to build capacity in developing and emerging economies, and ultimately assist in the development of a “truly” global baseline of climate disclosure standards.
The partnership comprises of more than 20 member organisations, including ACCA, Deloitte, the UN Development Programme, EY, and the European Accounting Association.
The partnership framework forms part of the ISSB’s bid to secure worldwide adoption of its proposed global baseline in sustainability reporting.
The board also confirmed it will issue final versions of International Financial Reporting Standard (IFRS) S1, General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2, climate-related disclosures next year.
Climate-related scenario analysis can help investors to understand how climate change can affect a company’s performance. It can range from simple narrative descriptions to more complex modelling.
The partnership is intended to operate over a five-year period in three phases.
The first phase will run until April 2023 and cover building relationships, establishing priorities, and securing funding.
The second between April and November 2023, will look on “producing resources available to all” to coincide with the release of the ISSB’s first two standards, IFRS S1 and IFRS S2.
“As we’ve heard from stakeholders, the need for climate-related financial disclosures is increasingly urgent,” said ISSB chair Emmanuel Faber, announcing the new initiative at the COP27 climate change summit in Egypt.
He added, “We are working collaboratively towards the implementation of effective sustainability disclosures for capital markets, which will empower market participants with the right information to support better economic and investment decision making.”
There is a “particular need” to consider the circumstances of smaller entities and economies throughout this process, the ISSB added in its statement.
Jingdong Hua, the ISSB’s vice chair noted that by making capacity building an “integral part” of the standard-setters mission, they were “committed” to working with partners to ensure “accelerated readiness” to adopt ISSB standards.
