Accountants and investors call for new global sustainability disclosures body to be based in London
Bodies representing swathes of the UK's financial sector have called for a planned new global body overseeing sustainability-related disclosures from businesses to be based in London, following a bid from Canada.
The International Sustainability Standards Board (ISSB) was first proposed by the not-for-profit the International Financial Reporting Standards Foundation (IFRS Foundation) earlier this year.
The aim of the new Board is to unify disclosures from corporates, helping investors and other stakeholders to properly compare their sustainability performance and related risks. At present, the Foundation has stated, a patchwork of various voluntary disclosure guidelines has made meaningful comparisons of corporate environmental credentials complicated.
As the IFRS Foundation mulls where the ISSB, which will have a global remit, should be based, several of the biggest industry associations in Britain’s finance space have urged the Foundation to select London.
In a letter sent to the IFRS Foundation’s chair Erkki Likkanen this week, accounting body ICEAW’s chief executive Michael Izza argues that there is a “compelling” case for choosing London.
“Our unanimous view is that the ISSB will have a pivotal role in enabling a world of sustainable economies, but that time is of the essence,” the letter states.“It is therefore vital that its work gets underway quickly, and that it achieves traction and impact as soon as possible.”
Notably, the IFRS Foundation itself is already based in London.
The letter goes on to describe London as “the world’s pre-eminent global financial centre” which would offer “access to concentrations of expertise across all financial and commercial disciplines – including a growing professional ESG community – and exceptional worldwide connections.”
It adds: “Governance standards generally in the UK are high, and professional services here are recognised for their quality, openness, international outlook, and culture of collaboration.”
As well as ICEAW, the letter has been backed by the City of London Corporation, which manages the Square Mile district; TheCityUK; the Investment Association and The 100 Group.
The UK Government has stated that it supports the ISSB’s creation but has not made a formal call for the IFRS Foundation to choose a UK location. At present, the only nation to have made this call is Canada. The Canadian deputy prime minister Chyrystia Freeland has stated that the nation would provide a ‘welcome fund’ to support the new body, should it choose to base itself there.
As a decision on the ISSB location is awaited, the IFRS Foundation has already laid out four core principles for the new body, namely investor focus for enterprise value; prioritising climate-related reporting before ‘quickly’ expanding to cover other ESG matters; building upon existing frameworks (including the Task Force on Climate-Related Disclosures) and taking a ‘building-blocks’ approach. This latter principle involves providing a globally consistent reporting baseline, with flexibility to go further in some geographical jurisdictions.
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