The Canadian government has backed the country’s offer to host the global headquarters for the new International Sustainability Standards Board (ISSB). Joe Pickard speaks to CPA Canada’s Rosemary McGuire to find out more
Since September last year, the IFRS Foundation has been consulting and seeking stakeholder feedback on a proposed ISSB.
Governing bodies and other organisations have been offering their feedback.
CPA Canada has backed its country’s offer to host the global headquarters for the new ISSB. The Canadian Champions for Global Sustainability Standards is a national collaboration with a shared objective to locate the new board in Canada.
Backed by support from the public and private sectors, the government of Canada has formally submitted an offer to the IFRS Foundation, which includes financial contributions for the successful start-up and operations of the ISSB, should the IFRS Foundation decide to locate the headquarters in Canada.
CPA Canada’s board of directors chair, Amanda Whitewood, says: “The overwhelming support associated with the Canadian offer clearly demonstrates the breadth and depth of this collaborative effort. Collectively, there is strong recognition that sustainability considerations are increasingly driving investment and policy decisions both domestically and internationally.”
Once established, the ISSB will develop a much-needed set of global standards for reporting on environmental, social and governance (ESG) matters. As the provider of international financial reporting standards in more than 140 jurisdictions around the world, CPA Canada believes the IFRS Foundation is well-positioned to create a global set of international sustainability standards through the ISSB.
The Accountant: There are a range of sustainability standards available. How impactful will the ISSB be?
Rosemary McGuire: Companies we have spoken with have expressed concern with the fragmented sustainability reporting environment, lack of a single set of global standards and varying requests for ESG information from various parties. International sustainability reporting standards will enable organisations to deliver consistent, comparable and reliable ESG information in a more helpful, effective and efficient way.
What differentiates the proposed ISSB from other initiatives is the widespread global support it has received at this early stage, most notably from securities regulators and governments, many of which are looking at the need for ESG disclosure rules.
It is particularly important that the International Organization of Securities Commissions has formed a technical expert group to collaborate with the IFRS Foundation on preparatory work for the ISSB. This is a major and helpful signal, as regulation and enforcement are key aspects of consistent global sustainability reporting.
TA: Do you think current sustainability standards set by organisations such as GRI and the Value Reporting Foundation will still be relevant?
RM: The IFRS Foundation has been clear that the proposed ISSB will be focused on information material to investors and initial standard-setting activity will be focused on climate change. Given this initial area of focus, there will be a need in the short-term for other bodies to address the information needs of other users and a broader range of sustainability reporting topics.
The IFRS Foundation is already working very closely with leading sustainability reporting standard setters and organisations. Further changes to the sustainability reporting ecosystem will undoubtedly occur as the ISSB becomes more established.
TA: How strong is public support for sustainability reporting in Canada?
RM: Very strong. Not a day goes by without multiple reports on the need to address ESG issues, often climate-related ones, and efforts by multiple parties to do so. The need for better sustainability reporting is often cited.
Enhanced ESG reporting is a top priority for Canadian organisations, and the Canadian voice was very prominent in the IFRS Foundation’s initial consultation on sustainability reporting in the fall of 2020.
Canada also recently submitted a bid to host the headquarters of the new ISSB, supported by the federal government and a coalition of over 55 Canadian public and private institutions.
The bid was a significant undertaking and demonstrates the strength of the support in Canada for better sustainability reporting. CPA Canada played a significant role facilitating this collaborative effort.
TA: What is CPA Canada doing to promote sustainability reporting? What are your plans in this area?
RM: CPA Canada has been researching and writing on sustainability issues for many years and we believe our profession has an important role to play in shaping the future of sustainability reporting.
Serving the public interest is core to the Canadian CPA profession. Recognising the value to society of high-quality sustainability reporting, we are committed to advancing better policy, regulation and standards in this area, including supporting the establishment of the ISSB. Globally accepted standards will enhance transparency and accountability, enabling better decisions and outcomes.
As Canada’s national accounting body, we also have an obligation to make sure unique Canadian issues are raised and dealt with. This is why we have established a Sustainability Reporting Advisory Committee with leading experts to help provide critical input as we monitor and respond to standards setting and regulatory developments.