Dive Brief:
- The International Finance Reporting Standards Foundation — which oversees the International Sustainability Standards Board — and the International Finance Corporation — a World Bank Group member — unveiled a strategic partnership Thursday to improve climate and sustainability reporting in emerging and developing economies.
- IFRS signed a memorandum of understanding with the Washington, D.C.-based global financial institution to create programs focused on promoting and building capacity for ISSB’s inaugural sustainability standards, to be applied across emerging and developing markets, per the releases.
- IFRS and IFC made the announcement during London’s Climate Action Week. The news comes the same week ISSB finalized its work plan for 2024-26, which centers around further streamlining climate disclosures.
Dive Insight:
IFRS announced in May that jurisdictions representing 55% of the world’s gross domestic product are aligning or incorporating the ISSB disclosure standards into their regulatory and legal frameworks. The partnership builds on ISSB’s agenda for the next two years, which has made supporting the implementation of the IFRS S1 and S2 climate disclosure standards ISSB’s top priority.
As part of the collaboration, IFRS and IFC will provide jurisdictions with technical assistance as well as “tailored support.” ISSB Vice Chair Jingdong Hua said the agreement combines the sustainability and climate reporting expertise of IFRS with IFC’s reach and insights.
“This partnership will expand our impact, helping enhance the quality of sustainability and climate-related financial reporting worldwide, especially in emerging markets and developing economies,” Hua said. “It plays a critical role in bringing structured and reliable sustainability information to the forefront of global markets, facilitating investments."
The partnership with the global investment and advisory firm will look to build on IFC’s prior Sustainable Banking and Finance Network and Beyond the Balance Sheet initiatives, the organizations said. SBFN is a platform for sustainable finance and financial regulators and industry groups from emerging economies. IFC provides emerging and developing economies with advisory services on climate and sustainability reporting through its Beyond the Balance Sheet initiative. IFC said in the release that those advisory services have been pushing for alignment with the European Union’s Corporate Sustainability Reporting Directive and the ISSB’s standards, which are interoperable.
IFC’s global manager for corporate governance and ESG advisory, knowledge and learning, Martine Valcin, said in the release that the agreement marked a “pivotal moment” in the advancement of sustainability and climate reporting.
“Our combined efforts are set to drive significant strides in standardizing and enhancing transparency, ensuring that EMDEs are not left behind in the global shift towards sustainable finance,” Valcin said.
ISSB’s work plan, released Monday, said the organization will look to improve transition plans and greenhouse gas emissions measurement. The organization also said in May it is seeking full interoperability between its single materiality disclosures with the Global Reporting Initiative’s double materiality frameworks. The organization’s work plan reaffirmed that as a priority over the next two years, along with an expanded partnership with the Carbon Disclosure Project.
