IFRS Foundation issues Consultation Paper on Sustainability Reporting

Oct 06, 2020

 

 

The IFRS Foundation Trustees has issued a Consultation Paper on Sustainability Reporting. Its purpose is to assess demand for global sustainability standards and, if demand is strong, assess whether and to what extent the Foundation might contribute to the development of such standards.

The Consultation Paper sets out possible ways the Foundation might contribute to the development of global sustainability standards by broadening its current remit beyond the development of financial reporting standards and using its experience in international standard-setting, its well-established and supported standard-setting processes and its governance structure.

One possible option outlined in the paper is for the Foundation to establish a new sustainability standards board. The new board could operate alongside the International Accounting Standards Board (IASB) under the same three-tier governance structure, build on existing developments and collaborate with other bodies and initiatives in sustainability, focusing initially on climate-related matters.

Described as "a critical step on the path towards a global solution to sustainability reporting" the consultation has been applauded by organisations such as IFAC, which believes that demand is urgent and real—from investors, policymakers and other stakeholders—for a sustainability reporting system that delivers consistent, comparable, reliable, and assurable information. 

According to IFAC CEO, Kevin Dancey, the IFRS Foundation is "the appropriate home" for a new sustainability standards board. Under the IFRS umbrella, the work of this new board could connect with the investor focus of the IASB, while also collaborating with respect to reporting requirements designed to address broader stakeholder interests. 

"Now is the time for Professional Accounting Organizations around the world to lend their expertise and support as the IFRS Foundation Trustees consider this important challenge. IFAC looks forward to engaging with our members and other key stakeholders in formulating a full supportive response to the Consultation.”