Madrid-headquartered International Organisation of Securities Commissions (IOSCO) has announced its endorsement of the newly updated ISSB standards, a further indication of the rapid take-up of the new climate reporting rules.
The International Sustainability Standards Board (ISSB) announced the adaptation of its new IFRS S2 standards the new rules set out climate-related financial disclosures in June this year. This follows the release of the IFRS S1 reporting standards in 2021, which cover general ESG risks.
IOSCO, the body which represents capital market authorities in 130 countries and regulates more than 95% of the world’s securities market, is now calling on its members to regulate the ISSB standards into their regulatory frameworks.
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By adopting the ISSB rules, IOSCO aims to contribute to consistency and comparability of global sustainability reporting. The move could have a significant impact on climate reporting for emerging markets, which account for 75% of IOSCO’s membership.
Commenting on the significance of the endorsement, Erkki Liikanen, chair of the IFRS Foundation Trustees and former governor of the Bank of Finland said: “IOSCO has a crucial role in shaping global financial regulation. Securities regulators are central to setting corporate reporting and disclosure requirements in capital markets. IOSCO’s endorsement sends a powerful signal to jurisdictions worldwide, providing them with the confidence they need to implement the ISSB Standards in their regulatory frameworks.”
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Earlier this month a meeting of the Financial Stability Board (FSB) in Frankfurt confirmed that the TCFD standards would be subsumed with the new IISB reporting rules, a move that could mark a change for investors in the EU, UK, Singapore, Canada, Japan and South Africa among others, where TCFD reporting on climate risks has become mandatory.
But with the ISSB standards being built on the four pillar structure of TCFD, industry experts predict that the transition to these new global reporting rules could be relatively smooth.
