Around 24 jurisdictions are looking to fully adopt or use standards issued by the International Sustainability Standards Board, according to Emmanuel Faber, the organisation’s chair.
The ISSB sits under the IFRS Foundation as a sister board to the International Accounting Standards Board, which developed the IFRS accounting standards in use by banks around the world.
“What I can say, qualitatively or quasi-quantitatively, is that [there are] probably two-dozen jurisdictions that have already started [to adopt or use the ISSB standards],” said Faber during a keynote interview at the Moral Money Europe summit in London on Wednesday.
“Stay tuned to check [jurisdictions’] coverage of [gross domestic product and their] market capitalisation coverage of greenhouse gas emissions — they’re probably significantly beyond what you can imagine. The momentum is incredible,” he added.
During next week’s International Organization of Securities Commissions meeting, the ISSB will announce their “first global stocktake” which details progress on jurisdictions’ adoption and proposed use of the ISSB standards, Faber said.
The ISSB issued its inaugural standards on sustainability-related disclosures for international capital markets — known as IFRS S1 and IFRS S2 — in June 2023, in the hope that they will become the baseline for a globally consistent sustainability disclosure framework for firms and investors.
The ISSB has not yet provided details about all of the jurisdictions the uptake includes, which is to be announced as part of their first global stocktake.
Countries such as Brazil, Costa Rica, Sri Lanka, Nigeria and Turkey have already announced decisions to adopt or otherwise use the ISSB standards, while Canada and Japan are in consultative stages, the ISSB said last month.
The uptake is diverse geographically, Faber said, not a “global north” or “European thing”. “It is a global stocktake of a very, very varied base of jurisdictions, which for me is critical.”
The push for adoption in some jurisdictions comes not only from securities regulators, but also from banks and wider public sector stakeholders, he said.
Earlier this month the UK announced delays to its sustainability disclosure standards, which were originally expected to be finalised in July 2024. Ahead of yesterday’s general election announcement, the UK government said it aimed to make the UK-endorsed ISSB standards available in the first quarter of 2025.
Multilateral development banks welcomed the use of sustainability reporting standards to complement existing financial reporting standards at COP28 in November last year.
There is a risk that jurisdictions use ISSB standards but with different approaches, which could affect its global consistency, Faber said.
“But at this stage, apart from a few countries that have already adopted [the standards], most of them are in the journey, [countries are] consulting, they’ve committed to [using the standards], they are in the process of going through that framework, but it’s not done yet.
“Ensuring that this journey is managed in each jurisdiction in a manner that is compatible with the commitments of today [...] is critical,” he added.
