IFRS – Working group to accelerate convergence in global sustainability reporting standards focused

The Trustees of the IFRS Foundation announced on 22 March 2021 the formation of a working group to accelerate convergence in global sustainability reporting standards focused on enterprise value and to undertake technical preparation for a potential international sustainability reporting standards board under the governance of the IFRS Foundation.

The working group will provide a forum for structured engagement with initiatives focused on enterprise value reporting, as described by the Trustees’ 8 March statement. It also responds to the 24 February statement by the International Organization of Securities Commissions (IOSCO), calling for the coordination of work to drive international consistency of sustainability-related disclosures with a focus on enterprise value creation.

Specifically, the working group will provide technical recommendations, including further development of the prototype built on the TCFD recommendations, as a potential basis for the new board to build on existing initiatives and develop standards for climate-related reporting and other sustainability topics. The group will also review how technical expertise and content might potentially be transitioned to the new board under the IFRS Foundation’s governance structure, with a view to facilitating consolidation and reducing fragmentation in sustainability reporting standards.

Participants in the working group include:

  • Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) – bringing recommendations for climate-related disclosures.
  • The Value Reporting Foundation (VRF) - bringing international standard-setting experience. The VRF represents the intended merger of the International Integrated Reporting Council (IIRC), which provides a framework for integrated reporting that connects financial and sustainability information, and the Sustainability Accounting Standards Board (SASB), which provides industry-specific standards for reporting on enterprise value.
  • Climate Disclosure Standards Board (CDSB), whose framework guides disclosure of material information for investors through the integration of climate, wider environmental and social-related information into financial reporting.
  • The World Economic Forum (WEF) will contribute their work on cross-industry metrics and disclosures that CEOs of a wide range of the world’s largest multinational companies have found to be important for disclosure.

Throughout the process, the working group will also engage closely with the Global Reporting Initiative (GRI) and CDP.

The full press release, including relevant links to the earlier statements, can be found here.

Published 25 March, 2021