Global Standards Body Tackles Business ‘Green Laundering’ Claims – .

Global Standards Body Tackles Business ‘Green Laundering’ Claims – .

  • The ISSB will be based in Frankfurt
  • President and Vice-President announced soon
  • New body seen as a step towards mandatory climate disclosures
  • First round of disclosures expected in the second half of 2022
  • Regulators review potential controls over disclosures

LONDON, Nov. 3 (Reuters) – The ‘greenwashing’ of companies keen to mass their environmental credentials and increase their appeal to ethical investors came under scrutiny on Wednesday with the launch of a standards body which aims to eliminate unwarranted climate claims.

The International Sustainability Standards Board (ISSB) seeks to build on and replace a patchwork of voluntary disclosure practices that have had mixed success, with “core” global standards that companies could use to educate investors about. the impact of climate change on their activities.

The aim is to tackle glamorous companies with their climate policies and business practices, designed to address the concerns of investors in what has become a multi-billion dollar global market for targeted environmental funds, social and governance (ESG).

“We’re really focused on greenwashing,” said Ashley Alder, chair of IOSCO, the global coordinating body of securities regulators, which helped set up the ISSB. “This is super important, and if you don’t have basic information on a globally comparable basis, you greatly increase the risk of greenwashing. “

“They (the new standards) are a benchmark but they are not fundamental,” said Alder, who also heads Hong Kong’s securities watchdog, adding that the new board is a “path” towards mandatory declaration of climate risks.

The ISSB, unveiled at the UN’s COP26 global climate summit in Glasgow and whose board and chair will be based in Frankfurt, will publish its first batch of global standards for corporate disclosures related to the climate next year. weather.

“The current debate over greenwashing is a symptom and it will not go away until we have a clear and enforceable set of global standards,” Gerald Podobnik, CFO of Deutsche Bank’s corporate division, said at the meeting. ‘an event at the top of Glasgow.


The parent company of the new body, the IFRS Foundation, has published a prototype climate reporting standards for the ISSB to discuss and submit for public consultation before their adoption in the second half of 2022.

It will be up to each country to decide whether it will apply and enforce the ISSB standards, but Klaas Knot, chairman of the Dutch central bank, told the climate summit that a voluntary approach to disclosures was reaching its limits.

“This is a big step forward for sustainability reporting and towards the development of a truly international corporate reporting system,” said Michael Izza, Managing Director of ICAEW, an accounting body professional in Great Britain.

Alder said IOSCO is considering a possible assurance framework to ensure rigorous checks on the correct application of ISSB standards by companies, as is already the case with financial reporting where external auditors verify that accounting rules are respected. Read more

“We see that assurance is one of the pillars of the stool that is needed to ensure maximum confidence in reporting under these standards,” Alder said.

IOSCO could also formally approve the new standards, meaning that its members, which represent 95% of the world’s stock markets, would then be obligated to implement and enforce them.

The success of the ISSB will depend on the support of major countries, but the European Union has already moved forward with its own disclosures, which are more ambitious because they require companies to also explain how their operations affect climate change.

“To be effective, standards will need to be introduced into regulation around the world, along with the associated enforcement, oversight, governance and controls, assurance and training,” said Veronica Poole, world leader in IFRS among Deloitte accountants.

Additional reporting by Tom Sims in Frankfurt; Editing by David Holmes and Steve Orlofsky

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