The IFRS Foundation trustees are exploring whether, and how, the global accounting standards body might become involved in developing global sustainability standards, given the heightened focus on environmental, social and governance (ESG) matters worldwide
It is seeking views on whether there is a demand for global sustainability standards and, if so, whether and to what extent the Foundation might contribute to the development of such standards.
The Foundation has published a 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.
Erkki Liikanen, chair of the IFRS Foundation trustees, said: ‘Calls for standardisation and comparability of reporting on sustainability and climate-change issues continue to grow as these matters become increasingly important to capital markets.
‘We therefore seek to assess whether there is demand for global sustainability standards and whether the IFRS Foundation should play a role in developing such standards.’
The consultation paper sets out critical success factors for the creation of a new board, including achieving sufficient support from public authorities and market participants; working with regional initiatives to achieve global consistency and reduce complexity in the reporting landscape; achieving the appropriate level of funding; and ensuring the current mission of the IFRS Foundation is not compromised.
The deadline for comments is 31 December.