STANDARD-SETTER SEEKS CONSULTATION ON DEVELOPING GLOBAL SUSTAINABILITY ACCOUNTING STANDARDS
The International Finance Reporting Standards Foundation (IFRSF), which is responsible for setting accounting rules used in over 140 countries, has released a consultation paper to gauge interest in creating a global standard for sustainability reporting (Reuters). The consultation will remain open for comment until December 31, 2020 (IFRSF).
The paper sets out several potential ways that the IFRSF could contribute to global environmental protection efforts. One such pathway includes creating a new board, modeled after their existing globally acclaimed International Accounting Standards Board, that focuses specifically on sustainability (Bloomberg). This idea has gained wide support from major personalities in the accounting field, including Kevin Dancey, the CEO of the International Federation of Accountants, and Barry Melancon, the president and CEO of the American Institute of CPAs (Accounting Today).
The release of this consultation is timely, as earlier this month five major sustainability standard-setters—the Carbon Disclosure Project, Climate Disclosure Standards Board, Global Reporting Initiative, International Integrated Reporting Council, and Sustainability Accounting Standards Board—released a joint statement promising to bring their existing rules into better alignment (Accounting Today, Regulation Asia). Thus far the existence of multiple standards, many of which are only regionally applied, has presented a significant barrier to funders seeking to compare sustainability across potential investments. The creation of a single, internationally accepted standard could incentivize greater investment in climate-friendly companies and lower the prevalence of “greenwashing” in multinational corporations (Reuters).