Supporting the ISSB Standards
At the beginning of 2024, Ruffer was invited to sign a statement co-developed by the PRI, the London Stock Exchange, and the UN’s Sustainable Stock Exchange Initiative (SSE). This built on the statement we endorsed at COP28, which supported the adoption of the ISSB’s sustainability and climate-related reporting standards. The new statement calls on relevant authorities across jurisdictions to commit to adopting the ISSB standards economy-wide by 2025.
As we wrote at the end of 2023, these two standards set out the general requirements for a company to disclose information about its sustainability related risks and opportunities and should help users to make decisions on providing resources to the company. Building on the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD), they 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 long held that improved market infrastructure – in the form of widely adopted regulatory frameworks, internal audit practices and standardised (preferably audited) corporate reporting – 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 their performance against peers would be plain to see, and the availability of higher quality information should contribute to the efficient allocation of capital.
Described as a call to action, the new statement highlights the essential role policymakers have to play in addressing the significant gaps in sustainability-related data globally, through the introduction of disclosure requirements for key sustainability-related information. The ISSB standards establish a framework for such disclosures, promoting the availability of consistent data which can be used to support economic and investment decisions. The statement also recommends principles – such as international coordination, economy-wide scope, and timely implementation - to be considered when developing disclosure requirements.
Further information about the statement can be found at unpri.org