IFRS Foundation considers proposing sustainability standards board

The IFRS Foundation Trustees have agreed to conduct further analysis as they consider whether to establish a new board that would issue global standards for sustainability accounting and reporting.

After meeting Monday, the trustees announced Tuesday that they intend to produce a definitive proposal on the formation of a new board by the end of September, with the possibility of an announcement on the establishment of a sustainability standards board at the meeting of the United Nations Climate Change Conference in November.

In Monday’s meeting, the trustees reviewed responses to the first three questions asked in their consultation paper on sustainability reporting. Those questions asked:

• What the demand is for global sustainability standards.
• Whether the IFRS Foundation should play a role.
• The requirements for success in any role the IFRS Foundation might play.

“The responses indicate growing and urgent demand to improve the global consistency and comparability in sustainability reporting, as well as strong recognition that urgent steps need to be taken and broad demand for the IFRS Foundation to play a role in this,” the trustees said in a statement.

Last fall, the International Federation of Accountants (IFAC) called for the creation of a new sustainability accounting standards board that would exist under the IFRS Foundation. The growing threat of climate change has caused increased interest in and urgency for sustainability accounting standards.

But the existence of several frameworks has led to a call for consistency, culminating in IFAC’s request for the IFRS Foundation to oversee a new sustainability accounting standards board.

— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is FM magazine’s editorial director.