Last updated: 04 Jun 2024 11:00 Posted in:
More than 20 countries encompassing over half of the global economy have now integrated or plan to integrate the ISSB standards into mandatory sustainability disclosures for companies.
China is the latest country to announce its intention to make ISSB-aligned sustainability reporting mandatory, with a draft of its Corporate Sustainability Disclosure Standards published on the Ministry of Finance’s website.
“The draft formulates the unified China Sustainability Disclosure Standards based on ISSB Standards, drawing on the beneficial experiences of ISSB Standards, aligning with China's context and showcasing Chinese characteristics,” the IFRS Foundation said. The IFRS was responsible for drawing up the ISSB standards.
Once the rules are finalised, mandatory reporting will be phased in from 2027 starting with listed companies and gradually expanding to non-listed companies.
Jurisdictions representing nearly 55% of global GDP, more than 40% of global market capitalisation and more than half of global greenhouse gas emissions are now on a pathway to adopt the sustainability disclosure standards issued by the ISSB for mandatory reporting, according to the IFRS Foundation.
Other jurisdictions seeking full (or partial) alignment with the ISSB standards include Brazil, Australia and the European Union, the latter of which has just published interoperability guidance between ISSB and its own ESRS.
“From major economies to emerging markets, jurisdictions around the world such as Brazil, Costa Rica, Japan, Nigeria and the UK are recognising the value of the ISSB Standards. Supporting completion of their regulatory processes, as well as the engagement with other jurisdictions around the world, is our priority in the near future in creating the global baseline of proportionate, high-quality sustainability-related financial disclosures,” said ISSB Chair Emmanuel Faber.
The IFRS Foundation has released a guide to help jurisdictions design and plan their adoption or other use of ISSB standards, which acknowledges various ways in which countries may use the standards and describes different models from full adoption and partial adoption to permission to use.
“I am encouraged by the fact that not even a year after our endorsement and call to action, so many jurisdictions are seeking to adopt or be informed by the ISSB Standards,” said IOSCO Chair Jean-Paul Servais. “The ISSB’s Inaugural Jurisdictional Guide… will be very useful to further support jurisdictional journeys towards adoption or use of the Standards and to bring much needed transparency to market participants on global progress.”
The IFRS Foundation also recently signed an agreement with the African Development Bank (AfDB) today in Nairobi to advance sustainability-related disclosure practices and capacity building on the continent.
“From major economies to emerging markets, jurisdictions around the world such as Brazil, Costa Rica, Japan, Nigeria and the UK are recognising the value of the ISSB Standards."
Emmanuel Faber, ISSB Chair