Overview
The IFRS® Foundation is a not-for-profit organisation responsible for developing global accounting and sustainability disclosure standards that bring transparency, accountability and efficiency to financial markets around the world. The IFRS Foundation created the International Sustainability Standards Board (ISSB) to respond to the need for globally comparable, comprehensive information about sustainability-related risks and opportunities to inform investment decisions.
The IFRS® Accounting Standards (developed by the International Accounting Standards Board) have become the global language of financial statements – trusted by investors worldwide and required for use in more than 140 jurisdictions.
Investors across many jurisdictions would like to include human capital/rights considerations into their investment process but cite the lack of consistent, comparable, and verifiable data on social issues as a barrier to action. There is a historic opportunity to lead the creation of a cohesive and coherent global system for standardised sustainability disclosure that would allow investors to consider sustainability performance. The ISSB is creating a global baseline of sustainability-related financial disclosures about a company’s risks and opportunities that are useful to investors when making decisions related to providing resources to the company: IFRS® Sustainability Disclosure Standards. The ISSB also manages the SASB® Standards that companies use to identify the sustainability-related issues in 77 industries most relevant to investor decision-making. The IFRS Sustainability Disclosure Standards, supported by the SASB Standards, will give investors the comparable information they need to make informed investment decisions.
Our funding to the IFRS Foundation to support the ISSB’s work, including its efforts to advance regulatory adoption; research on risks and opportunities related to human capital to inform investors’ decisions; and enhancement of the SASB Standards.
According to the findings of ‘A Legal Framework for Impact,’ in the 11 jurisdictions considered, investors are highly likely to have a fiduciary duty to assess and manage systemic impacts to their portfolio. Systemic social issues like inequality impact the broader economy and consequently an investor’s portfolio returns. To support investors in addressing systemic social risks more, better data on human capital is needed.
Read more about ISSB on their website: https://www.ifrs.org/groups/international-sustainability-standards-board/