People and Planet in the Accounts: IFRS consultation welcomed in UK
13 November 2020: Several UK Government departments and regulators have come out in support of the IFRS’s consultation on a global approach to sustainability reporting and a possible role for the foundation.
The Department for Business, Energy and Industrial Strategy, the Bank of England, the Department for Work and Pensions, the Financial Conduct Authority, the Financial Reporting Council, Her Majesty’s Treasury and The Pensions Regulator have all welcomed the IFRS Foundation consultation paper, which seeks to assess demand for international sustainability reporting standards and explores ways in which the foundation might contribute to their development.
The consultation includes the request for feedback on the establishment of a new Sustainability Standards Board (SSB), to sit alongside the International Accounting Standards Board, within the IFRS Foundation structure.
The initial response from the various UK Government departments and regulators says: “We believe that establishing an SSB alongside the IASB will promote much-needed integration of financial and non-financial reporting, within a common architecture. A transparent and robust governance structure should, in our view, be a prerequisite for establishing an independent and impartial sustainability reporting standard setter. For these reasons, the foundation is very well-placed to lead this conversation and work, and we are grateful that it has done so.”
The consultation period ends on 31 December 2020 and a fuller response will be submitted by these departments and regulators, along with responses from other interested parties, in due course.
The IFRS Foundation Consultation Paper, amongst other matters, sets out possible ways in which the Foundation might contribute to the development of global sustainability standards by broadening its current remit beyond the development of financial reporting standards and using its experience in international standard-setting, its standard-setting processes and its governance structure.
Sarah Dunn, Technical Manager in ICAEW’s Financial Reporting Faculty, commented: “There is a pressing need for the development of a global set of high-quality sustainability reporting standards that have international resonance. Issues such as climate change, environmental degradation, human rights and other social concerns are increasingly important to a wide range of stakeholders, yet the reporting landscape for this type of information is fragmented and can be confusing to navigate.
“The IFRS Foundation stands in a strong position to provide global leadership in the development of a single set of international sustainability reporting standards. ICAEW welcomes this important consultation paper and will be responding in due course.”
Find out more about the work ICAEW and its members are doing to change behaviour and drive sustainable outcomes by visiting icaew.com/technical/sustainability.