Last week the International Sustainability Standards Board (ISSB) released proposed standards for general sustainability disclosure and specific climate related disclosure. The ISSB is soliciting feedback on the new standards thru July 29, 2022 with intention of issuing final guidance by year end. The standards build on the Task Force on Climate-Related Financial Disclosure’s (TCFD) framework which is already being incorporated into official required disclosures from multiple organizations and countries including the European Union, the United Kingdom, Switzerland, New Zealand, and Hong Kong. ISSB's proposals also incorporate the Sustainability Accounting Standards Board (SASB) industry specific disclosures. Their proposals follow the U.S. Security Exchange’s Commission’s request for comments on their proposed climate related risk disclosures the week prior. This is good news for the investment community looking for greater understanding of what companies are doing to mitigate climate risks, but even better news for sustainability practitioners who have been struggling for decades to encourage businesses to be more vigilant over their environmental and social impacts.
Global standards for sustainability and climate disclosures are a huge step forward on the path towards meeting the Paris Agreement’s goal of limiting climate change well below 2°, preferably to 1.5°C (2.7°F) (compared to pre-industrial levels). Companies must understand their emission levels, in order to reduce and off-set them. The new proposals will force businesses to exam their climate risks and make plans accordingly. Companies will have an even stronger impetus to reduce emissions and drive sustainability. They will be reporting annually: progress must be shown. Given the current state of the climate crisis these standards can’t come soon enough.