The International Sustainability Standards Board (ISSB) has unveiled its inaugural sustainability reporting standards with support from regulatory bodies like the Financial Conduct Authority (FCA).
The newly released standards, known as IFRS S1 and IFRS S2, address the market’s demand for consistent and reliable corporate sustainability disclosures.
The UK Government has signalled its backing for the ISSB and is preparing to establish a mechanism for endorsing and adopting the standards. This move aligns with the government’s commitment to transparency and improved conduct in the ESG ratings market as part of the Edinburgh reforms introduced in December 2022.
FCA director of environmental, social & governance, Sacha Sadan, expressed delight at the launch and highlighted the ISSB’s mission to establish a global language for companies to communicate their sustainability efforts. The FCA plans to update their climate-related disclosure rules to reference these standards.
In parallel, the UK government is currently conducting consultations on a potential regulatory regime for ESG rating providers. The consultation paper, which opened on March 30, 2023, outlines proposals for the regulatory framework, with the consultation period ending on June 30, 2023.
The ISSB’s release of sustainability reporting standards, along with regulatory support, is anticipated to encourage wider adoption of sustainable practices globally, driving progress toward a net-zero future.
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