Sustainability standard-setter organisation ISSB has announced that it will help investors understand how a company incorporates sustainability to create value.
Meeting in Montreal during the ongoing UN Convention on Biological Diversity, or COP15, the International Sustainability Standards Board (ISSB) said in a news release that it is making progress on several biodiversity issues, including natural ecosystems and “just transition,” a framework that aims to address the socioeconomic impact of the shift to a low-carbon economy.
It now plans to articulate the relationship between sustainability matters and financial value creation by adding clarification to a general requirements standard, the spokeswoman said in an email.
That general sustainability-related disclosures standard, S1, will describe sustainability as the ability for a company to sustainably maintain resources and relationships with, and manage its dependencies and impacts within its whole business ecosystem over the short, medium and long term, the release said.
Faber said the ISSB would publish its climate standards and then look at rules on biodiversity. The board hopes to form a global baseline across most of the world, allowing investors to compare companies’ performance across borders.
While there is currently no specific date, Faber said he did not expect this to take more than one year. The ISSB was originally due to have its climate rules ready by the end of 2022.
“I think it’s reasonable to expect there would be substantial progress and information shared with the market directionally in 2023,” he added.
Faber said the body would look to build upon the work of existing market-led initiatives such as the Taskforce for Nature-related Financial Disclosures (TNFD), as well as other standards and disclosure frameworks.
As part of its efforts, ISSB also said it had appointed two non-executive special advisers who will counsel Faber on issues relating to natural ecosystems and ensure the voice of indigenous communities is reflected in the rules.
Karin Kemper, former global director for environment at the World Bank, will advise on natural ecosystems. Geordie Hungerford, chief executive of the First Nations Financial Management Board in Canada, will advise on indigenous issues.
“The ISSB is bound to play a fundamental role in helping address climate change and nature loss, decreasing systemic risk for the planet, the global economy and the financial system,” Kemper said in a statement.
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