To support its work on securities issuers' sustainability-related disclosures, the Sustainable Finance Taskforce (STF) of the International Organization of Securities Commissions (IOSCO) held two roundtables on 26 April and 7 May 2021 the latter jointly organized with the World Economic Forum (WEF). The objective of the roundtables was to engage in a constructive dialogue with global stakeholders on IOSCO's priorities to enhance the reliability, comparability and consistency of sustainability-related disclosures and collect views on the practical implementation of a global system architecture for these disclosures.
The roundtables were attended by senior representatives from a wide range of stakeholder groups, spanning IOSCO STF member jurisdictions, including international and multilateral organizations, sustainability reporting organizations; global asset managers and other capital markets participants; corporate issuers; accounting firms and the accountancy profession; the IFRS Foundation; and IOSCO member authorities.
Participants emphasized the importance of continuing the pace and building on the existing momentum to deliver the urgent improvements needed in sustainability reporting. Across the two sessions, there was strong support for the key elements of IOSCO's vision for an International Sustainability Standards Board (ISSB) under the IFRS Foundation and a clear willingness among participants from all stakeholder constituencies to work collaboratively with IOSCO and the IFRS Foundation to deliver this vision. There was also broad-based agreement that, building on existing initiatives, the ISSB would be able to deliver high-quality international sustainability-related reporting standards to address the priority needs of capital market participants on a reasonable timeframe.
Roundtable participants identified some important matters for IOSCO to consider before recommending to its members that ISSB standards be used for cross-border offerings or when setting sustainability reporting requirements at the domestic level. IOSCO will reflect on the detailed feedback received.
Across the two sessions, IOSCO gathered views and feedback from stakeholders on three main topics:
(i) how best to give the ISSB a running start in the development of investor-oriented standards with an enterprise value lens by building on the existing content of leading sustainability reporting organizations and the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD)
(ii) how to accelerate the implementation of ISSB standards and set a clear pathway towards adoption as a baseline for consistent and comparable approaches to mandatory sustainability-related disclosures across jurisdictions.
(iii) how in practice to deliver a building blocks approach, which sets ISSB standards as a common global baseline and ensures effective interoperability with any complementary standards to meet the demands of other stakeholders or jurisdiction-specific requirements.
Among the main messages from the roundtables:
IOSCO greatly appreciates the participation from a wide array of senior stakeholders and for the depth of the feedback received. These insights will be incorporated into IOSCO's upcoming report on issuers' sustainability disclosures, which is expected to be published in June.
Ashley Alder, IOSCO Chair and Chief Executive Officer of the Securities and Futures Commission (SFC) of Hong Kong, said: "I would like to thank Professor Klaus Schwab, WEF Chairman and his team for the invaluable cooperation in co-hosting the IOSCO strategic roundtable. We are greatly encouraged by the feedback received from global stakeholders and their strong support for IOSCOÂ´s strategic vision towards the establishment of a global sustainability reporting standard-setting architecture under the IFRS Foundation. The IOSCO Technical Expert Group, in close coordination with the IFRS Foundation Technical Working Group, will be focusing its efforts in the next few months to ensure that the enhanced prototype delivers the content needs identified by stakeholders so that it can be used as a sound basis for the development of a global standard by the ISSB."
Erik Thedeen, Chair of the IOSCO Sustainable Finance Task Force and Director General of Finansinspektionen of Sweden, said: "IOSCO is making significant progress in helping the establishment of the ISSB by COP 26 in November 2021 with a view to delivering a global baseline of investor-oriented sustainability-related disclosure standards focused on enterprise value creation which can be rapidly adopted and mandated across jurisdictions. This will drive much-needed international consistency. We will continue to engage with key jurisdictions and other stakeholders across the official and private sectors to promote appropriate implementation of the proposed building blocks approach."