A network has been established by 31 countries to support the adoption and use of International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards, or ISSB Standards.

Adopting these standards helps countries align their sustainability-related disclosure requirements with the global baseline, thereby connecting them to global capital pools and investors seeking new investment opportunities, ISSB chairperson Emmanuel Faber said during a briefing on December 18.

“We are delighted to see considerable interest from emerging markets jurisdictions towards adopting the ISSB’s global baseline of sustainability disclosures for capital markets. This progress is also important to all other jurisdictions because multinational companies with global supply chains will stand to benefit from the availability of comparable data and disclosures from across the value chain and such disclosures will facilitate trade,” he said.

The ISSB Standards support globally consistent, comparable and reliable sustainability-related disclosures to meet the information needs of investors and other participants in the world’s capital markets.

The network will start with the 32 members, representing the 31 jurisdictions, of the global national securities regulatory commissions association International Organisation of Securities Commissions' (IOSCO's) Growth and Emerging Markets Committee (GEMC), which include developed and emerging States.

The ISSB issued the ISSB Standards in June 2023 in response to investor demand for decision-useful, comparable information and the need for a more efficient global reporting landscape.

In July 2023, IOSCO endorsed the ISSB Standards for capital market use and called on its members to consider using the ISSB Standards in their jurisdictions.

Since IOSCO’s endorsement of the ISSB Standards, a total of 56 jurisdictions, including the EU member States, from developed and emerging markets have already taken action to adopt or otherwise use ISSB Standards. Half of these jurisdictions have already finalised their adoption of the ISSB Standards.

Together, these jurisdictions represent nearly 60% of global GDP, more than 40% of global market capitalisation, and more than half of global greenhouse-gas emissions said IOSCO board chairperson Jean-Paul Servais during a briefing on December 18.

GEMC members joining the network expressed strong appetite for the network, including to build capacity on supervisory and enforcement aspects of ISSB Standards; set up deep dives to discuss and understand how the jurisdictional guide and other educational materials can support adoption; and help them assess market readiness, he said.

Through the network, GEMC members will benefit from assistance in building local capacity to implement the requirements of the standards. The network will also provide a platform for advancing information sharing at a regional level.

“We have seen a strong interest from GEMC members wanting to introduce the ISSB Standards into their regulatory frameworks. They are willing to implement international standards that enhance international consistency and comparability of climate- and other sustainability-related disclosures for investors,” Servais said.

“We are also acutely aware that GEMC members have signalled a strong desire for support to help them progress their adoption or other use of the ISSB Standards. This dedicated network will offer them expert support with the help of the ISSB and other partners,” he emphasised.

The network is intended to support jurisdictions, especially emerging markets, in their adoption journeys, and will comprise jurisdictions already in the process of adoption or use and jurisdictions considering adoption or use.

“Many emerging markets are taking clear steps towards adoption or use of the ISSB Standards and I urge them to complete the efforts to avail the Standards in different languages for speed of adoption,” said IOSCO vice-chairperson and GEMC chairperson Dr Mohamed Farid Saleh.

The new network facilitates enhanced capacity building to assist securities regulators in this journey, he said.

Together, the IOSCO GEMC members joining the network represent 4.3-billion people in emerging markets and developing economies, which is more than half of the world’s population.

The GEMC members also represent nearly half of Africa and the Middle East’s GDP and 60% of their market capitalisation, as well as more than two-thirds of Latin America and the Caribbean’s GDP and more than 85% of its market capitalisation.

Further, the IOSCO is also working on other reporting and accounting standards, including industry-specific sustainability standards, which it aims to release by 2026. It is also researching nature and human capital and will release guidelines on these topics within about two years from now, said Faber.