Supporting climate reporting standards at COP28
Before COP28, the annual UN climate conference, we declared our support for the adoption of the International Sustainability Standards Board’s (ISSB) climate-related reporting standards. The full statement, which follows, demonstrates the strong support amongst companies, investors, stock exchanges and a number of other market participants to advance active responses to the risk of climate change.
“Climate risks are increasingly having a real effect on companies and capital.
Therefore – in response to calls for climate action at COP28 – we support the establishment of market infrastructure to enable consistent, comparable climate-related disclosures at a global level. We are committed to advancing the adoption and use of the ISSB’s Climate Standard as the climate global baseline.”
At Ruffer, we have long advocated improved environmental disclosures. As a supporter of CDP, we have participated in non-disclosure campaigns to encourage companies we invest in to submit environmental data in a way which allows us to compare them with peers. This year, the ISSB published two standards setting out the general requirements for a company to disclose information about its sustainability related risks and opportunities that should help users to make decisions on providing resources to the company. They build on the recommendations of the Taskforce on Climate-related Financial Disclosures and require entities to publish information about climate risks and opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance or cost of capital over the short, medium or long term.
We have in the past encouraged companies to complete voluntary disclosures such as the CDP climate change questionnaires, and we will continue to do so. But market infrastructure in the form of regulatory frameworks, internal audit practices and corporate reporting software would help to ensure the development and use of helpful information about sustainability-related risks and opportunities. We think public disclosure of standardised, comparable data would encourage companies to improve their practices, not least because performance against peers would be plain to see.
Furthermore, the availability of higher quality information should contribute to the efficient allocation of capital. We joined almost 400 organisations from 64 jurisdictions in supporting the climate-related reporting standards. More information about the ISSB and the statement we supported can be found on the IFRS website.