The Financial Stability Board (FSB) has published its annual progress report on climate-related disclosures. The report indicates further development regarding climate disclosures over the last year. International regulatory bodies are focused on creating comparable public disclosures of climate-related financial risks to use in the analysis of vulnerabilities in the financial system.
In the report, the FSB welcomed the International Sustainability Board (ISSB) disclosure standards and plans to work with other relevant bodies to promote them. The ISSB standards will serve as a framework for different companies across the globe to provide climate related disclosures consistently. Implementation and the applicability of ISSB standards with individual jurisdictional disclosure frameworks is valuable to regulatory bodies to compare climate-related disclosures from companies in different countries.
Additionally, the International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA) are making significant progress in their efforts to produce a global set of assurance, ethics, and independence standards. This set of standards is intended to improve the quality and reliability of sustainability-related information through third-party assurance. Compliance and enforcement of these standards could deter “greenwashing”.
Also of note, the Task Force on Climate-related Financial Disclosures (TCFD) released its final status report and will be disbanded now that it has completed its final initiative. TCFD was created by the FSB and made up of industry representatives. It created a set of voluntary disclosure recommendations for use by companies to provide information to investors, lenders, and insurance underwriters about their climate-related financial risks.
The report indicates that progress continues as all FSB jurisdictions either have requirements, guidance, or proposals pending related to climate disclosures.
World Council continues to advocate for proportionality where appropriate and monitor developing disclosure requirements closely. Click here to access the FSB press release and related reports.