IFAC releases practical Framework for deploying Global Standards at Local Level
IFAC, the International Federation of Accountants published a Framework for Implementing Global Sustainability Standards at the Local Level, focusing on their building blocks approach published in May 2021. IFAC believes that jurisdictions must begin examining how global standards that the International Sustainability Standards Board (ISSB) intends to develop, starting with climate, can fit together with sustainability-related reporting requirements set at the jurisdictional level.
The growing demand for sustainability has fueled a global requirement for corporate reporting and especially a sustainability reporting with higher-quality information and insights about company performance, risks, opportunities, and long-term prospects. For investors and sustainability-minded stakeholders to assess a company’s future performance, they need a clear and comprehensive picture of its ability to create sustainable value over time—not just a snapshot of its finances. Therefore, corporate reporting must evolve to deliver the proper information to all stakeholders in general.
“As work to establish the ISSB advances, PAOs, firms, and professional accountants in business should be engaging now with their policymakers to consider what mechanisms may need to be established to make forthcoming reporting requirements effective in their jurisdiction. IFAC’s framework sets out various pathways for local implementation of the IFRS initiative that can all lead to the global and harmonized corporate reporting system we need for investors, capital markets, and stakeholders at large.”IFAC CEO Kevin Dancey
IFAC is committed to working on behalf of the global accountancy profession to address the evolution of standard setting and corporate reporting. Rationalization and alignment need to occur for sustainability information to achieve its full potential. As a result, in September 2020, IFAC called for a global solution led by an International Sustainability Standards Board to sit alongside the International Accounting Standards Board under the IFRS Foundation.
This is a journey toward a unified, coherent, global and authoritative standard-setting process, with outcomes applied everywhere. IFAC calls on the accountancy profession to lead and support this transformation – both in responding to change and anchoring it in essential skillsets.
IOSCO’s Sustainability-related Issuer Disclosures report proposes a timeline for the ongoing work of the IFRS Foundation–with the ISSB climate standard expected to be completed by June 2022. Jurisdictions that begin engaging with policymakers now will be able to capitalize on the forthcoming standards–and therefore serve the public interest–as soon as they are finalized.
IFAC urges its member organizations to continue their support for the IFRS initiative, to engage now with local policymakers, and to provide feedback on the framework for making global sustainability standards local.
The framework for implementing global sustainability standards at the local level is available here.
Source: IFAC – How Global Standards Become Local