Ceres welcomes today’s release of the climate and sustainability reporting standards by the International Sustainability Standards Board (ISSB), which cover the disclosure of material information about a company’s significant sustainability-related risks and opportunities.
“This is a crucial advance towards a global, harmonized set of sustainability disclosures. It’s most impressive to see such strong alignment between the SEC’s proposed climate disclosure rule and the ISSB standard,” said Ceres CEO and President Mindy Lubber. “This type of harmonization is exactly what investors and companies have been asking for. Climate-related financial risk is affecting the financial market today and understanding that risk is an urgent need. It’s fantastic to see that we’re moving so much closer to improving the transparency, quality and consistency of climate risk information worldwide.”
The new standards are designed to complement the IFRS Accounting Standards, used by 144 countries worldwide. Once they are finalized, governments would decide whether to require their use, just as they have decided whether to require the application of the Accounting Standards. The “Exposure Drafts” will be open for comment until July 29 after which they will be finalized and can be used by companies.
The standards were developed for investors, with input from standard setters and securities regulators, including the Securities and Exchange Commission and other peers. Both the SEC climate disclosure proposal and the ISSB climate standard incorporate the recommendations of the Task Force on Climate-related Financial Disclosures, including disclosures regarding governance, strategy, risk management and metrics and targets. This alignment demonstrates that standard setters and financial regulators, when faced with the same evidence of financial risks and investor needs as the SEC, landed on a very similar disclosure regime.
Lubber added, “This ISSB standard affirms and supports the importance of the SEC Draft Climate Disclosure Rule. This ISSB Standard clearly shows that the SEC climate risk disclosure expectations are not only a mainstream expectation but will be matched by other jurisdictions shortly.”
About Ceres
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. The Ceres Accelerator for Sustainable Capital Markets is a center within Ceres that aims to transform the practices and policies that govern capital markets in order to reduce the worst financial impacts of the climate crisis. It spurs action on climate change as a systemic financial risk—driving the large-scale behavior and systems change needed to achieve a net zero emissions economy. For more information, visit ceres.org and ceres.org/accelerator and follow @CeresNews.