The International Sustainability Standards Board (ISSB) was set up by the US-based not-for-profit group the International Financial Reporting Standards (IFRS) foundation at COP26 this week.
The IFRS foundation said it had consolidated two sustainability reporting organisations, the Value Reporting Foundation and the Climate Disclosure Standards Board, to create “a global standard-setter for sustainability disclosures for the capital markets”.
The foundation also published two prototype standards to enable the ISSB to rapidly build on existing frameworks, including the Task Force on Climate-Related Financial Disclosures (TCFD), when developing its standards.
Standards will be subject to full public consultation and can be considered for adoption by jurisdictions on a voluntary basis, the IFRS foundation said. Jurisdictions “will have their own legal frameworks for adopting, applying or otherwise making use of international standards”.
Sustainability standards firm, GRI (Global Reporting Initiative), welcomed the establishment of the board.
Eric Hespenheide, interim chief executive of GRI, said: “GRI is pleased that the IFRS Foundation has recognized the merits of incorporating sustainability considerations into financial disclosures, through the creation of a sustainability standards board. We also welcome that the reporting organisations with a core focus on investors needs are to come together under one house.”