What will be the impact of the “Sustainability Standards Board”?
– The SSB will create a global standard, which is ideal to tackle a global problem.
– To be effective, the SSB’s standards must be mandatory globally.
Here’s a note from Sarah-Jayne Dominic of the Financial Reporting Council about the SSB:
A good article summarizing the development of a Sustainability Standards Board (SSB) by the IFRS Foundation. Important points to note:
- Many of the problems such as climate change are global and need global standards adopted everywhere.
- Working with the existing sustainability standard setters/frameworks – TCFD, GRI, SASB, IIRC is a great starting point for the SSB with much of the groundwork already in place.
- To be effective, such standards must be mandatory and this can only take effect at national or regional level – this requires political will by many countries and certainly the signs are looking good in major markets such as the EU and the US, but also the UK, New Zealand, Canada as they mandate TCFD-reporting to varying degrees.
- There is still not one set of truly global financial reporting standards, but two: IFRS which is principles based and US GAAP which is rules-based, and so it will be interesting to see if global sustainability standards are possible and what model they will follow.
- And finally, all of this takes time, yet my personal hope is that it will happen more quickly than development and adoption of financial reporting standards.
And here’s a note from Bob Eccles:
In a letter to their colleagues of the International Business Council (IBC) of the World Economic Forum, Brian Moynihan (Chairman and Chief Executive Officer of Bank of America and Chairman of the IBC) and Professor Klaus Schwab (Founder and Executive Chairman of the World Economic Forum), write about the importance of establishing a global set of standards for sustainability reporting. In it, they express strong support for the Sustainability Standards Board (SSB) proposed by the IFRS Foundation Trustees. They also make a commitment to help mobilize the business community in support of the SSB.