Chair of the IFRS Foundation Trustees, Erkki Liikanen addressed COP28 to reflect on progress since the IFRS Foundation announced the decision to establish the International Sustainability Standards Board at COP26. Mr Liikanen confirmed three further commitments in the IFRS Foundation’s efforts to support efficient and resilient capital markets through robust sustainability-related financial disclosures. Furthermore, he announced the re-appointment of ISSB Chair, Emmanuel Faber, for a second term and emphasised that Emmanuel will continue to work in partnership with his vice-chairs Sue Lloyd and Jingdong Hua.
Two years ago at COP26, in Glasgow, we announced—after a broad international consultation—that the IFRS foundation is ready to serve to create global sustainability disclosure standards. This consultation process was demand driven.
The announcement included three pillars.
Firstly, the IFRS Foundation is ready to establish the International Sustainability Standards Board (ISSB). Its mission will be to deliver a global baseline of sustainability-related financial disclosure standards for the capital markets.
Secondly, we made an undertaking to consolidate the investor-focused sustainability disclosure landscape. This consolidation was made possible due to the commitment of market-leading standard-setting organisations and to the broad support of institutions and actors in the sector.
The consultation also underscored the crucial importance of interconnectivity between financial and sustainability disclosure reporting. These were instrumental factors in the decision to create the ISSB within the IFRS Foundation.
Thirdly, we promised to publish the first two prototypes, on general requirements disclosures and climate related disclosures.
Today, we can report that all of these commitments that we made two years ago have been fulfilled. During this period we have enjoyed the active oversight and support by the Monitoring Board of public authorities currently chaired by Takashi Nagaoka.
We have moved further after a rigorous due process. On 26 June this year, the ISSB delivered its inaugural sustainability standards—IFRS S1 and IFRS S2. This marked a transformational moment in the advancement of the investor-focused sustainability disclosure landscape.
On 25 July we received the hugely important endorsement of these standards by IOSCO—the global body for securities regulators. I want to pay a particular tribute to IOSCO and its current chair Jean-Paul Servais for his leadership and support with the IFRS Foundation on this journey.
Our work continues. The IFRS Foundation has developed a capacity-building programme to aid the implementation of standards and has established advisory groups to enable structured engagement with stakeholders. To foster interoperability of the ISSB’s Standards with other standards, we have worked in active collaboration with numerous bodies and authorities in the field.
And it is fitting, here at COP28, to mark the official end of the work of the Task Force on Climate-related Financial Disclosures (TCFD). The Financial Stability Board announced earlier this year that the ISSB’s Standards reflect the ‘culmination’ of the work of the TCFD. This provides yet further consolidation of the disclosure landscape.
Finally, the ISSB has conducted a global consultation to determine the next focus areas for sustainability disclosures.
Here at COP28, on behalf of my fellow IFRS Foundation Trustees, I confirm three new commitments to support efficient and resilient capital markets through robust sustainability-related financial disclosures.
Firstly, we will implement our capacity building programme so that developing and emerging jurisdictions are better placed to adopt and use the ISSB’s Standards. The launch of the IFRS Sustainability knowledge hub—here at COP28—is an important part of this work.
Secondly, we will advance jurisdictional adoption of the ISSB’s Standards through bilateral dialogues with governments and regulators.
A number of jurisdictions have already taken steps to introduce and adopt the ISSB’s Standards. Many others are starting their journeys towards adoption of these Standards.
We will continue to work closely with both IOSCO and the Financial Stability Board who play essential roles in the adoption work. We look forward to jointly developing aligned workstreams with IOSCO, in anticipation of the 2024 IOSCO Annual Conference in Athens.
Thirdly, we will advance new standard-setting initiatives to build out the global baseline of sustainability-related disclosures following feedback to the recent consultation on the ISSB’s future agenda.
To spearhead these efforts, I am delighted to announce that the IFRS Foundation Trustees have re-appointed ISSB Chair Emmanuel Faber for a second term, providing continuity of the ISSB’s leadership through this new phase of work. Mr Faber’s second term will start on 1 January 2025 and run through to 31 December 2027. We are confident that under Emmanuel’s able leadership, we will thrive in our efforts to bring further transparency, accountability and efficiency to financial markets around the world.
Emmanuel will continue to be supported by vice-chairs Sue Lloyd and Jingdong Hua.
With Sue Lloyd, the ISSB has the benefit of vast standard-setting experience. She started as the Vice-Chair on 1 March 2022. No-one understands technical standard-setting in an adapting world better than the person who led the development of IFRS 9 in the aftermath of the 2008 financial crisis. Sue represents the past, present and future of standard-setting and the backbone of the IFRS Foundation.
Jingdong Hua will continue to oversee our vital work on capacity building, aided by his vast experience as a former Treasurer of the World Bank. His nomination was effective 1 October 2022. Jingdong truly understands the support many jurisdictions can benefit from to reach international standards.
To achieve our goals, we also continue to count on the widespread and significant support of leaders in global capital markets.
Today, as the ISSB transitions to its next phase of operations—from creation to action—we have received the support of over 390 global organisations from 64 jurisdictions, including associations whose members number over 10,000 member companies and investors, as well as multilateral and market authorities to commit to advance the ISSB climate global baseline.
We will continue to support regulators and market participants globally towards adopting the ISSB’s Standards, and together we will shape reporting norms to align with the realities of the risks and opportunities associated with climate change.
Thank you for your attention.