Green landscape with sustainability symbols

The International Organization of Securities Commissions (IOSCO) has expressed support for the work of accounting standards setter the IFRS Foundation — in the foundation’s bid to craft global standards and set up a new unit to focus on sustainability standards.

Speaking at the COP26 conference today, Ashley Alder, chairman of IOSCO and CEO of the Hong Kong SFC, said that he welcomed the prototype standards published by the IFRS, which are expected to be finalized in 2022 under the new International Sustainability Standards Board (ISSB).

“If the ISSB’s future standard meets IOSCO’s expectations, our endorsement will support all our 130 members in considering ways they might adopt, apply or be informed by the standard,” Alder said.

IOSCO said that the establishment of the ISSB, and the issuance of an international climate disclosure standard, are key pillars of its overall sustainable finance strategy. Previously, the group expressed concerns about the fragmented, industry-led standard setting, and the growing threat of greenwashing.

By the end of year, IOSCO plans to publish its analysis of the disclosure hurdles facing issuers and asset managers, and its assessment of sustainability data and ratings.

In 2022, the global group of regulators will also focus on assessing the ISSB’s proposed disclosure standard, with the goal of finalizing an approved standard by the end of 2022.

“Now, important steps have been taken by the IFRS Foundation and the market can get an idea of where we are heading,” said Erik Thedéen, chair of IOSCO’s sustainable finance task force and head of the Swedish Financial Supervisory Authority.

“A global baseline for sustainability disclosures is a prerequisite to enable investors to correctly evaluate the risk and opportunities in investments, regardless of where they are in the world. This will enable the financial sector to better allocate capital towards sustainable investments,” Thedéen said.

He added: “We want to get the future risk and opportunities that comes with the transition to a carbon net zero world, into the pricing of investments today. We are particularly pleased that markets can begin to see how a global baseline and jurisdiction specific requirements can be operated compatibly.”