The International Association of Insurance Supervisors (IAIS) has urged the International Sustainability Standards Board (ISSB) to continue its focus on climate change and ensure a strong correlation between climate disclosures and financial reporting.
In a letter to the ISSB, the IAIS said that “ensuring effective implementation of the climate standard is more important than moving into new areas.” The IAIS also said that the ISSB should consider what else needs to be done to deliver effective economy-wide climate disclosures across jurisdictions.
The IAIS’s letter comes as the ISSB is developing its work plan for 2024-2025. The ISSB was established in 2021 to develop global sustainability standards for financial reporting. In June, it published its first two finalised standards, the S1 General Requirements for Disclosure of Sustainability-related Financial Information, and S2 Climate-related Disclosures.
The IAIS is a global organisation that represents insurance regulators from over 200 countries and jurisdictions. Their letter is a significant endorsement of the ISSB’s climate-first focus.
The letter also highlights the importance of climate disclosures for insurance companies, stating that it is “important to ensure that insurers have access to the data they need from their counterparties to manage climate risks” such as rising sea levels, more extreme weather events, and changes in agricultural yields.
The ISSB is expected to release its work plan for 2024-2025 in the coming months. The plan is likely to include a focus on climate disclosures, as well as other sustainability issues such as biodiversity and human rights.
A number of organisations have endorsed the ISSB’s final standards, including the International Organisation of Securities Commissions (IOSCO) and the UK’s Financial Conduct Authority (FCA).
Announced earlier this year, the FCA plans to incorporate the S1 and S2 standards into the UK’s own Sustainability Disclosure Standards (SDS), aiming to finalise its policy position by the end of 2024.
