Timeline of moves towards global ESG standards
2022
June
IFRSF Trustees announce appointment of Richard Barker, Verity Chegar, Bing Leng, Ndidi Nnoli-Edozien, Jeffrey Hales and Michael Jantzi as ISSB Board members.
ISSB and GRI announce further details on how to co-ordinate their work programmes and standard-setting activities.
IFRSF Trustees sign memorandum of understanding to obtain the financial support of the Government of Canada and the Government of Quebec for the ISSB.
Several UN organisations respond with a joint statement to the proposed standards of the ISSB, noting that the standards can support global convergence of sustainability-related disclosure, create a common reporting baseline and help mainstream sustainability-related issues into regular business strategy and management.
European Council and European Parliament reach a provisional political agreement on the CSRD proposed by the EC in April 2021.
May
ISSB publishes summary of the necessary steps required to establish a comprehensive global baseline of sustainability disclosures.
G7 Finance Ministers and Central Bank Governors issue communiqué which welcomes the inauguration of the ISSB and its progress of work on the global baseline of sustainability reporting standards.
Chairs of the IASB and ISSB communicate plans for the future role, governance and development of the VRF’s Integrated Reporting Framework and integrated thinking principles as the VRF is being consolidated into the IFRSF.
April
IOSCO outlines its plans for reviewing the draft ISSB standards, with a view to informing its potential endorsement of the final standards.
IFRSF signs memorandum of understanding that establishes the Montreal presence of the ISSB. The Montreal centre will host key functions on behalf of the ISSB, including the coordination of activity across the Americas.
ISSB forms working group comprised of several jurisdictions to enhance the compatibility between the ISSB’s exposure drafts and jurisdictional initiatives.
EFRAG launches consultation on draft ESRS with comments requested by 8 August 2022.
March
SEC issues proposed rule The Enhancement and Standardization of Climate-Related Disclosures for Investors. Under the proposed rule, a registrant would be required to provide disclosures about greenhouse gas emissions (with attestation for Scope 1 and Scope 2 disclosures), certain financial statement disclosures, and qualitative and governance disclosures within its registration statements and annual reports (e.g. Form 10-K)
IFRSF and GRI announce a collaboration agreement under which their respective standard-setting boards, the ISSB and the Global Sustainability Standards Board (GSSB), will seek to co-ordinate their work programmes and standardsetting activities to enhance interoperability between reporting on enterprise value to meet the needs of capital markets and reporting on impacts to stakeholders more broadly
ISSB launches consultation on its first two proposed standards (IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures), open until 29 July 2022
January
IFRSF announces Sue Lloyd as the ISSB Vice-Chair and Janine Guillot as Special Advisor to the ISSB Chair. In addition, the IFRSF Trustees are seeking to appoint up to eleven inaugural Board members for the newly formed ISSB
The consolidation of the CDSB into the IFRSF is completed
2021
December
IFRSF Trustees appoint Emmanuel Faber to chair the ISSB
November
IFRSF announces the creation of its new ISSB that will develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs
IFRSF Trustees publish a revised constitution and corresponding feedback statement on their consultations
CDSB and the VRF commit to consolidate into the ISSB, which is expected to be completed by June 2022
IFRSF Trustees provide an update on the work of the TRWG. This includes the publication of the Climate-related Disclosures Prototype and the General Requirements for Disclosure of Sustainability-related Financial Information Prototype that the ISSB will build on for their first standards
Finance Ministers and Central Bank Governors from 41 jurisdictions on six continents publicly welcome the announcement of the establishment of the ISSB and its work programme to develop a set of internationally consistent, high-quality and reliable baseline standards for disclosure of sustainability-related information on enterprise value
September
IFRSF conducts stakeholder outreach on the work of the TRWG
July
G20 Finance Ministers and Central Bank Governors publish a communiqué, in which they welcome the work of the IFRSF to develop a baseline global reporting standard under robust governance and public oversight, building upon the TCFD framework and the work of sustainability standard-setters, involving them and consulting with a wide range of stakeholders to foster global best practices
June
G7 Finance Ministers and Central Bank Governors publish a communiqué, in which they support the IFRSF’s initiative on sustainability reporting
IIRC and SASB merge to form the Value Reporting Foundation (VRF), with three key resources: Integrated Thinking Principles, Integrated Reporting Framework and SASB Standards. It is committed to delivering a more coherent corporate reporting system by working closely with the IFRSF and other standard-setters
IOSCO Board publishes a report on issuers’ sustainability-related disclosures that elaborates on IOSCO's vision and expectations for the IFRSF’s work towards a global baseline of investor-focussed sustainability standards to improve the global consistency, comparability and reliability of sustainability reporting
May
EC tasks European Financial Reporting Advisory Group (EFRAG) to start technical work to develop draft sustainability reporting standards consistent with the CSRD
The US President’s international climate finance plan references a commitment to work with IFRSF and IOSCO to support and shape their work towards ‘consistent, comparable and reliable climate-related financial disclosures’ and to enhance the compatibility of resulting recommendations or standards ‘with the US domestic framework and regulatory process’
The European Commission (EC) publishes its proposed Corporate Sustainability Reporting Directive (CSRD), the successor to the Non-Financial Reporting Directive (NFRD)
IFRSF publishes a feedback statement and consultation on constitutional changes which can bring in provisions for ISSB
April
March
IFRSF confirms there is significant support for them to establish ISSB and that it is on track to make an announcement in time for COP26. IFRSF sets up a Technical Readiness Working Group (TRWG) to provide technical input and commits to use the prototype (see above) as a potential basis for a new standard. The group will also consider how technical expertise might transition to a new board, with a view to consolidation. The participants in this group are CDSB, IASB, TCFD, VRF (formerly IIRC and SASB) and WEF with IOSCO as observer
IOSCO sets up a technical expert group to inform the organisation on its potential endorsement of ISSB as the global standard-setter for sustainability-related corporate reporting
SEC initiates a public consultation on disclosure rules and guidance on to climate-related disclosures, proposed modifications, potential new SEC disclosure requirements and potential new disclosure frameworks
IOSCO Board commits to work with the IFRSF to develop an effective system architecture for setting sustainability disclosure standards under a new International Sustainability Standards Board (ISSB). They see this as a potential route to developing standards that can serve as a ‘baseline for consistent and comparable approaches to mandatory sustainability-related disclosures across jurisdictions’
February
2020
December
The ‘Group of 5’ issues a prototype climate-related financial disclosure standard to illustrate how their different frameworks and standards, together with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD), could form the basis of a global standard. It is intended to give the IFRSF a running start in developing sustainability reporting standards
October
WEF International Business Council (IBC) publishes Measuring Stakeholder Capitalism, which includes 21 core metrics covering the pillars of principles of governance, planet, people and prosperity. The metrics leverage standards from the five leading sustainability standards and framework reporting providers. The project highlights that business wants to be part of the solution and acts as a catalyst towards global standards
September
IFRS Foundation (IFRSF) issues a consultation on establishing a sustainability standards board. It received nearly 600 responses
The leading sustainability standard-setters and frameworks (‘Group of 5’: CDP, Climate Disclosure Standards Board (CDSB), Global Reporting Initiative (GRI), International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB)) issue a Statement of Intent. In this, they set out a vision for a comprehensive corporate reporting system and make a commitment to work together and with the IFRSF to achieve this. The work was facilitated by Deloitte, the Impact Management Project (IMP) and the World Economic Forum (WEF)
ESG Reporting Acronyms
Acronym
Name
What they do
How they fit in with moves to global sustainability reporting standards
Standard-setters and frameworks
CDP
(Formerly Carbon Disclosure Project)
Runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts, with a particular focus on climate change. Its system is based on a questionnaire that is sent to companies on a range of climate-related topics, from which it develops rankings, benchmarks and data feeds
Committed to work towards comprehensive corporate reporting system (Statement of Intent) and developed prototype climate-related financial disclosure standard
CDSB
Climate Disclosure Standards Board
An international consortium that provides companies a framework for reporting environmental information to investors with the same rigour as financial information
Committed to work towards comprehensive corporate reporting system (Statement of Intent) and developed prototype climate-related financial disclosure standard
Member of IFRSF Technical Readiness Working Group (TRWG)
Issued staff educational paper in March 2021 on the intersection of ESG and financial accounting standards
Responsible for setting accounting standards for public companies in the US (Generally Accepted Accounting Principles)
Financial Accounting Standards Board
FASB
Member of TRWG
TCFD recommendations support effective climate-related financial disclosures to investors, based on the pillars of governance, strategy, risk management, metrics & targets. Established by the Financial Stability Board (FSB)
Task Force on Climate-related Financial Disclosures
FSB-TCFD
Committed to work towards comprehensive corporate reporting system (Statement of Intent) and developed prototype climate-related financial disclosure standard
Signed a memorandum of understanding with EFRAG
Sets standards for reporting to stakeholders on economic, environmental and social impacts, providing information about an organisation’s positive or negative contributions to sustainable development
Global Reporting Initiative
GRI
Issued Staff Audit Practice Alert, The Consideration of Climate-Related Risks in an Audit of Financial Statement in October 2020
Published Extended External Reporting (EER) Assurance Non-authoritative Guidance in April 2021
Sets high-quality international standards for auditing, assurance, and quality control that strengthen public confidence in the global accounting profession
International Auditing and Assurance Standards Board
IAASB
Published educational material: Effects of climate-related matters on financial statements in November 2020
Member of TRWG
Independent body responsible for development and publication of International Financial Reporting Standards (IFRS), which are adopted in 144 jurisdictions
International Accounting Standards Board
IASB
Concluded consultation on establishing an international sustainability standards board (ISSB). IFRSF is on track to announce the new ISSB by COP26
Established the TRWG and is consulting on constitutional changes to bring in ISSB
A not-for-profit, public interest organisation established to develop a single set of high-quality, understandable, enforceable and globally accepted accounting standards. It appoints members of IASB
International Financial Reporting Standards Foundation
IFRS Foundation
/ IFRSF
See entry under VRF below
International Integrated Reporting Council
IIRC
The board that IFRSF proposes to establish alongside IASB with a remit to set global sustainability reporting standards
The intention is for ISSB to play the same role for sustainability reporting that IASB plays in financial reporting
International Sustainability Standards Board
ISSB
See entry under VRF below
Sustainability Accounting Standards Board
SASB
Merged entity of IIRC and SASB from June 2021 to provide investors and corporates with a comprehensive corporate reporting framework across the full range of enterprise value drivers and standards to drive global sustainability performance.
VRF has three key resources: Integrated Thinking Principles, Integrated Reporting Framework and SASB Standards
- Integrated Reporting Framework: Integrated reporting is a process founded on integrated thinking for communicating how an organisation’s strategy, governance, performance and prospects lead to the creation of value in the short, medium and long term
- SASB Standards: Standards for disclosure of sustainability information to investors, by sector. SASB Standards identify issues most relevant to enterprise value creation across 77 industries
Committed to work towards comprehensive corporate reporting system (Statement of Intent) and developed prototype climate-related financial disclosure standard
Member of TRWG
Value Reporting Foundation
VRF
Other bodies with direct interest in moves to sustainability reporting standards
The executive branch of the European Union, responsible for proposing legislation, enforcing EU laws and directing the union's administrative operations
Develops the Corporate Sustainability Reporting Directive (CSRD) aimed at improving sustainability reporting and ensuring it is brought into a company’s management report to better leverage the potential of the European single market and to contribute to the transition to a fully sustainable and inclusive economic and financial system in line with the European Green Deal and the UN Sustainable Development Goals (SDGs)
European Commission
EC
Private body, established by the EU to serve the European public interest, in developing and promoting European views in the field of financial reporting, ensuring that these views are considered by the IASB and advising the EC on endorsement of IFRS for use in the EU
Reforms of EFRAG are underway under a proposed CSRD, so that it is expected to become the EU standard-setter for European sustainability reporting standards from 2022. The EC has already tasked EFRAG to start the work for developing and proposing EU sustainability reporting standards
European Financial Reporting Advisory Group
EFRAG
Promotes international financial stability by co-ordinating national financial authorities and international standard-setting bodies in developing strong regulatory, supervisory and other financial sector policies, and encouraging coherent implementation in jurisdictions
Established TCFD in response to addressing systemic risks of impact of climate change on financial stability
Financial Stability Board
FSB
The global organisation for the accountancy profession, comprising 180 member and associate organisations in 130 countries and jurisdictions, representing nearly 3 million professional accountants
Issued statements in support of global sustainability reporting standards under the umbrella of IFRSF
International Federation of Accountants
IFAC
The international body that brings together the world's securities regulators and is recognised as the global standard-setter for the securities sector
Sits on the Monitoring Board that oversees IFRSF
Established a Technical Expert Group under its Sustainable Finance Taskforce that will undertake preparatory work in advance of IOSCO‘s potential endorsement of the ISSB as the global standard-setter for sustainability-related corporate reporting
Observer of TRWG
International Organization of Securities Commissions
IOSCO
A plan of action for people, planet, peace and prosperity, signed by governments in 2015, comprising 17 Sustainable Development Goals and 169 targets to be achieved by 2030
No direct connection to global standard-setting but SDGs are a frequent reference point in corporate reporting
United Nations’ Sustainable Development Goals
UN SDGs
An international organisation for public-private co-operation, aiming to engage political, business, cultural and other leaders of society to shape global, regional and industry agendas
The WEF’s International Business Council (IBC) has identified 21 common metrics for value creation, known as Stakeholder Capitalism Metrics. The project is seen as a stepping stone towards global sustainability reporting standards
Member of TRWG
World Economic Forum
WEF / The
Forum