Today, the FCA welcomes the International Sustainability Standards Board (ISSB) launch of its first sustainability-related reporting standards: the General Requirements for Disclosure of Sustainability-related financial information (IFRS S1), and the requirements for Climate-related Disclosures (IFRS S2).
These standards answer the clear market demand for complete, consistent, comparable and reliable corporate sustainability disclosures.
Including this information in annual financial reports will inform companies’ own decisions, and capital allocation by investors and lenders; feed data services; underpin instrument and product design; and steer corporate decision making.
We have been a strong advocate of the development of international corporate reporting standards on sustainability. Along with our regulatory partners at the International Organization of Securities Commissions (IOSCO), we have supported the work of the IFRS Foundation in this area, co-leading IOSCO’s workstream on sustainability reporting.
The UK Government also recently signalled support for the ISSB and announced that it would be establishing a mechanism for formal UK endorsement and adoption of the standards. Once available for use in the UK, our intention is to update our climate-related disclosure rules to reference the ISSB standards.
We remain committed to playing an active role in supporting implementation of the ISSB Standards and helping to build capacity to adopt these around the world. And we will continue to influence and promote the ongoing development of a global baseline of sustainability-reporting standards that will meet the needs of capital markets and serve the public interest.
Sacha Sadan, Director of Environmental, Social & Governance, at the Financial Conduct Authority said: 'At its launch at COP26 in November 2021, our CEO, Nikhil Rathi, referred to the ISSB as a ‘game-changer’ – and what we’ve seen over the past 18 months or so is that he was absolutely right. We have been working closely with the ISSB since the start and are hugely supportive of its mission to create a common, global language for companies around the world to communicate their sustainability stories in a consistent and comparable way. That is why we are delighted to see the final standards launched today.'