ISSB Forms Working Group to Prevent Standards Fragmentation

Group will seek to align standards-setting work on sustainability-related financial disclosures across major jurisdictions.

The International Sustainability Standards Board (ISSB) has formed a new working group to establish dialogue for enhanced compatibility between its exposure drafts and ongoing jurisdictional initiatives on sustainability disclosures.

The exposure drafts were published late last month, proposing sustainability and climate reporting standards for consultation until 29 July. The standards are expected to be finalised by year-end, to establish a global baseline of sustainability disclosure requirements that can be used by market participants voluntarily or incorporated into jurisdictional mandatory requirements.

The ISSB was formally unveiled at COP26 last November by Erkki Liikanen, Chair of the IFRS Foundation Trustees.

The formation of the working group is part of an “extensive programme of outreach activity” designed to encourage feedback on and engagement with the consultation from all jurisdictions and stakeholder groups, the ISSB said in a statement on Wednesday (27 April).

The new working group will seek to align work being done across jurisdictions to set standards in the field of sustainability-related financial disclosures, with a view to optimising reporting efficiency for companies in those jurisdictions.

The working group comprises members from China’s Ministry of Finance, the European Commission, the European Financial Reporting Advisory Group (EFRAG), Japan’s Financial Services Authority (FSA), the Sustainability Standards Board of Japan (SSBJ) Preparation Committee, the UK Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC).

Working group meetings will take place in May and July, meeting summaries will be published, and input from the working group will be considered by the ISSB in public meetings as part of its deliberation process for the consultation.

The ISSB also plans to create a new advisory body, the Sustainability Standards Advisory Forum, during the next quarter to facilitate regular dialogue with, and high-level advice from, a broad set of jurisdictions.

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