The International Organization of Securities Commissions (IOSCO) has today announced its endorsement of the International Sustainability Standards Board’s (ISSB) Standards following its comprehensive review of the Standards.
The ISSB was established in November 2021 to deliver a global baseline of sustainability-related disclosure for global capital markets.
IOSCO is now calling on its 130 member jurisdictions—capital markets authorities that regulate more than 95% of the world’s securities markets—to consider how they can incorporate the ISSB Standards into their respective regulatory frameworks to deliver consistency and comparability of sustainability-related disclosures worldwide.
IOSCO’s endorsement sends a strong signal to jurisdictions around the world that the ISSB Standards are fit for purpose for capital market use, enabling pricing in of sustainability-related risks and opportunities, and to facilitate enhanced data collection and analysis.
The endorsement is expected to resonate as well with growth and emerging markets which make up 75% of IOSCO membership.
The announcement comes at a time when a number of jurisdictions are taking steps to introduce mandatory requirements for use of the ISSB’s first two Standards, IFRS S1 and IFRS S2.
The endorsement echoes IOSCO’s endorsement of the IFRS Accounting Standards over 20 years ago, which helped underpin widespread comprehensive adoption of IFRS Accounting Standards enabling them
to become the truly global language of accounting—trusted by investors and companies worldwide and required for use by more than 140 jurisdictions.
To coincide with the endorsement, the IFRS Foundation has published a high-level roadmap providing transparency around the IFRS Foundation and the ISSB’s strategy to support jurisdictional adoption. This document is a precursor to an Adoption Guide for regulators, which will be finalised later in 2023.
Emmanuel Faber, ISSB Chair said:
Widespread regulatory adoption of a global baseline of sustainability-related disclosures through the ISSB Standards will secure the consistency and comparability of information that capital markets demand. IOSCO’s timely endorsement and strong encouragement for capital market authorities to act confirms that the ISSB Standards are fit for purpose. Together with IOSCO, we are committed to deliver a substantial and inclusive capacity building programme to set everyone in motion.
Erkki Liikanen, Chair of the IFRS Foundation Trustees said:
Alignment of the sustainability disclosure landscape and reducing the fragmentation of initiatives is of vital importance. Bringing this vision into reality takes leadership and foresight. I pay tribute to IOSCO for its initial encouragement of the IFRS Foundation to establish the International Sustainability Standards Board. I also thank IOSCO for their continued oversight through the IFRS Foundation Monitoring Board, and for their thorough review of the ISSB Standards which has led to today’s endorsement.