Jurisdictions representing over half of the global economy by GDP are taking key steps towards adopting or aligning their sustainability disclosure standards with the ISSB Standards.
This move aims to ensure global comparability in companies’ climate and other sustainability-related disclosures, setting a standard for transparency and accountability in the financial sector.
More than 20 jurisdictions have committed to using or are in the process of introducing ISSB Standards into their legal or regulatory frameworks. These jurisdictions collectively account for nearly 55% of global GDP, over 40% of global market capitalisation, and more than half of global greenhouse gas emissions.
Notable examples include the European Union and China, which have taken proactive measures to integrate ISSB Standards into their sustainability reporting frameworks.
The European Union, through the Corporate Sustainability Reporting Directive established in June 2022, laid the groundwork for aligning its sustainability reporting standards with ISSB Standards. Similarly, China recently issued an Exposure Draft of Chinese Sustainability Disclosure Standards for Business Enterprises, drawing on ISSB Standards to formulate unified sustainability disclosure standards tailored to the country’s context.
Despite significant global progress, challenges remain, particularly in the United States, where the Securities and Exchange Commission (SEC) has yet to formally recognise ISSB Standards for use in climate disclosure regulations. However, the SEC has acknowledged similarities between its climate-disclosure rules and ISSB Standards, indicating a potential for future alignment.
The IOSCO endorsement of ISSB Standards in July 2023 has catalysed momentum towards establishing a global baseline for sustainability disclosures. The release of the Inaugural Jurisdictional Guide by the IFRS Foundation provides valuable insights into how jurisdictions are progressing towards adopting or using ISSB Standards, offering market participants transparency and clarity on global sustainability initiatives.
The IFRS Foundation’s Regulatory Implementation Programme aims to support jurisdictions in their adoption or use of ISSB Standards through tools, educational materials, and capacity-building initiatives. Collaboration between the IFRS Foundation, IOSCO, and other international partners underscores a concerted effort to advance sustainability disclosure practices worldwide.
“Today marks an important milestone in IOSCO’s objective to establish a global framework for comparable reliable sustainability disclosures for the capital markets. I am encouraged by the fact that not even a year after our endorsement and call to action, so many jurisdictions are seeking to adopt or be informed by the ISSB Standards,” said Jean-Paul Servais, IOSCO Chair
Copyright © 2024 RegTech Analyst
Copyright © 2018 RegTech Analyst
