IFRS Foundation proposes new sustainability standards board, publishes feedback on sustainability reporting

The IFRS Foundation on April 30 published proposed amendments to its constitution to form a new sustainability standards board within the organization. In addition, IFRS trustees have published a summary of feedback received to their consultation on sustainability reporting.

International financial reporting standards (IFRS) — a set of accounting rules and standards that determine how accounting events should be reported in a business’s financial statements — are set by the IFRS Foundation’s standard-setting body, the International Accounting Standards Board.

IFRS trustees plan to make a final decision about the new board sometime before the November 2021 United Nations COP26 conference, according to an IFRS statement.

The trustees are seeking feedback on proposed changes to the foundation’s constitution to accommodate the potential formation of the new international sustainability standards board.

Specifically, comments are sough on proposals to amend the constitution to:

• expand the Foundation’s objectives to create a board that will set IFRS sustainability standards under the Foundation’s governance structure;
• set out the structure and function of the new board; and
• align other parts of the constitution with the creation of the new board.

The consultation is open for comment for 90 days and closes on July 29, the IFRS Foundation said.

The trustees also published a feedback statement that summarizes comments on their September 2020 consultation on sustainability reporting and their subsequent responses.

The consultation sought feedback on the following topics:

• The need for consistency in reporting and comparable information;
• the potential creation of an international sustainability standards board (new board) under the governance of the IFRS Foundation; input on key requirements for success as conditionalities for further developing a new board;
• relationships with other institutions and initiatives;
• the target audience of sustainability reports;
• the priority of initially focusing on climate-related financial disclosures before potentially broadening its remit into other areas of sustainability reporting;
• assurance of reporting; and
• other matters.

A total of 577 responses were submitted from individuals and organizations around the world, with feedback showing “urgent demand” for global standards and widespread enthusiasm for the creation of a new sustainability standards board within the governance structure of the foundation, the IFRS Foundation said.