IOSCO endorses ISSB standards

In the ever-evolving landscape of sustainable investing, the alignment of global standards is paramount. Just last week, the International Organization of Securities Commissions (IOSCO) made a groundbreaking announcement that it has given its stamp of approval to the sustainability-related financial disclosure standards introduced by the International Sustainability Standards Board (ISSB). These standards, known as IFRS S1 and IFRS S2, herald a new era of consistent, reliable, and comparable sustainability information.

Over the past two years, IOSCO has deeply engaged with the ISSB. Following a comprehensive analysis, IOSCO has determined that the ISSB Standards are appropriate to serve as a global framework for capital markets to develop the use of sustainability-related financial information in both capital raising and trading and to help globally integrated financial markets accurately assess relevant sustainability risks and opportunities.

But the journey doesn’t end with endorsement alone. IOSCO, which oversees more than 95% of the world’s financial markets with its 130 member jurisdictions, has now issued a clarion call. It urges its members to consider how they might adopt, apply or otherwise be informed by the ISSB Standards, given their specific jurisdictional frameworks.

As the world of asset management gravitates towards a more sustainability-centric ethos, the endorsement of the ISSB Standards by IOSCO is a watershed moment. It offers a clear path towards a globally harmonised approach to sustainability reporting. For asset managers, this means an opportunity to better evaluate investments, drive meaningful change through capital allocation, and deliver on the sustainability expectations of clients and stakeholders.

As asset managers navigate the seas of sustainable investing, the ISSB Standards, backed by IOSCO, promise to be a beacon, guiding them towards more informed, consistent, and impactful decision-making.

In parallel with the endorsement, the IFRS Foundation unveiled a strategic roadmap, outlining the mechanisms that the IFRS Foundation and the ISSB are working on to support regulatory implementation. This roadmap serves as a precursor to a comprehensive Adoption Guide targeted at regulators, set to be finalised later in 2023.

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