The trustees of the IFRS Foundation have this week published a consultation paper which assesses “demand for global sustainability standards” and “whether and to what extent” the foundation may contribute to the development of such standards.
The IFRS foundation, created with the aim of developing a “single set of globally accepted accounting standards”, houses the IFRS Standards which now include financial reporting standards required for use by more than 140 jurisdictions.
IFRS said the paper comes “amid heightened focus on environmental, social and governance matters”. Earlier this week, the accountancy sector saw the “Big Four” launch an initiative on standardised ESG reporting.
The organisation added that trustees are now seeking “stakeholder input” on the need for global sustainability standards as well as “gauging support” for the foundation’s potential involvement.
The consultation paper proffers ways the foundation could contribute, involving the broadening of its “current remit” beyond the development of financial reporting standards. IFRS said it would use its “experience in international standard-setting, its well-established and supported standard-setting processes and its governance structure”.
It said that one such option may be the establishment of a new sustainability standards board operating alongside the International Accounting Standards Board under the same three-tier governance structure.
Erkki Liikanen, chair of the IFRS foundation trustees, said: “Calls for standardisation and comparability of reporting on sustainability and climate-change issues continue to grow as these matters become increasingly important to capital markets.
“We therefore seek to assess whether there is demand for global sustainability standards and whether the IFRS Foundation should play a role in developing such standards.”
Liikanen added that key foci for the foundation included “sufficient support from public authorities and market participants; working with regional initiatives to achieve global consistency and reduce complexity in the reporting landscape; and ensuring the current mission of the IFRS Foundation is not compromised”.
The consultation is open for comment until 31 December 2020.