International standards for sustainability: fighting an uphill battle?

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Notwithstanding the benefits, the fragmentation and multiplicity of corporate (sustainability) reporting frameworks have also increased costs for companies, investors and regulators. On 3 November 2021, the IFRS Foundation announced the creation of the International Sustainability Standards Board (ISSB), with the first set of standards to be released during the second half of 2022. How will these new standards translate into practice? What are the key aspects to consider when devising solutions at the international level?

The demand from investors for high-quality, reliable and comparable information is increasing. Striking the balance between substance, (double) materiality and alignment is not an easy exercise. The added value for a jurisdiction such as the EU is not evident, especially considering the scope of the Corporate Sustainability Reporting Directive (CSRD), the mandate given to the European Financial Reporting Advisory Group (EFRAG), and the link with the EU taxonomy.

Cosmina Amariei is a Researcher at the European Capital Markets Institute (ECMI)