Momentum building behind global firms’ climate disclosures
LONDON: More countries than initially expected are adopting international climate-related disclosure standards, a global rulemaking body said on Tuesday, but cautioned that significant departures from the norms would come at a cost. The International Sustainability Standards Board (ISSB), created to write “baseline” disclosure rules for companies to stop “greenwashing,” finalized its rules a year ago and on Tuesday gave an update on adoption.
“There is a momentum, and it’s significantly higher than we expected,” ISSB Chair Emmanuel Faber told a news conference. More than 20 jurisdictions are taking steps to introduce ISSB in some form, representing nearly 55 percent of global economic growth, more than 40 percent of global stock market capitalization, and more than half of global greenhouse gas emissions, the G20-backed organization said.
They include Japan, Singapore, Australia, Canada, Britain, Brazil, Costa Rica, Bolivia, Hong Kong, South Korea, Malaysia, Kenya, Nigeria and China. The EU has been included among the 20 as the bloc and the ISSB have agreed that their respective company climate disclosures are interchangeable for global firms. Faber said only a “small minority” of the 20 were proposing tweaks for implementing ISSB norms, potentially creating more compliance costs for international companies.
“We want to have a combination of being proportionate, in acknowledging that not each jurisdiction starts from the same place,” Faber said. “There will be a cost for jurisdictions over time, and for their companies and investors, not to be joining the global baseline,” Faber added.
Global securities regulators under the umbrella of IOSCO have “endorsed” the ISSB norms for use by listed companies. IOSCO Chair Jean-Paul Servais said it was “quite normal” for there to be some “carve outs” or departures from the ISSB norms, particularly in emerging economies, as up to 130,000 companies globally are set to apply the standards. “It’s a danger to think we can be perfect in one day,” Servais said, adding that proportionate changes would help avoid political and company pushback against the disclosures. The US has written its own rules, though they have been put on hold pending a court challenge.