The IFRS Foundation has in the past fortnight announced that it wants to jump start its sustainability reporting agenda by establishing a working party that will examine a prototype standard.
This push for a single suite of reporting standards for sustainability has been endorsed by the corporate regulators’ peak body, the International Organisation for Securities Commissions, and the IFRS Foundation is hot footing it to get things moving.
A prototype standard has been developed by a committee of organisations that have previously created individual frameworks such as the Global Reporting Initiative and the International Integrated Reporting Committee.
“Specifically, the working group will provide technical recommendations, including further development of the prototype built on the TCFD recommendations, as a potential basis for the new board to build on existing initiatives and develop standards for climate-related reporting and other sustainability topics,” the IFRS Foundation says.
“The group will also review how technical expertise and content might potentially be transitioned to the new board under the IFRS Foundation’s governance structure, with a view to facilitating consolidation and reducing fragmentation in sustainability reporting standards.”
Setting a single set of sustainability standards for reporting non-financial information will follow a similar path to the development and then adoption of International Financial Reporting Standards.
Multiple sets of standards that were developed over the years for the purposes of financial reporting in specific jurisdictions were gradually converted over time to a single set of accounting standards in many countries.
The only substantial amendments to international accounting standards in Australia are usually related to domestic legal requirements and measurement and recognition criteria.
A major priority for the project to get sustainability reporting standards hammered into one set for global use is reporting on issues related to climate change.
Reporting on climate matters has assumed a greater importance in the past four months following the inauguration of the Biden Administration on January 20.
President Biden signed an executive order that specified a range of reporting criteria for climate change.