Dear Chair Faber and Vice-Chair Lloyd,
The Global Financial Markets Association (“GFMA”) and Bank Policy Institute (“BPI”) welcome the opportunity to comment on the International Sustainability Standards Board’s (“ISSB”) Exposure Drafts of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (the “Sustainability Proposal”) and IFRS S2 Climate-related Disclosures (the “Climate Proposal”).
We agree that there is a need for consistent global disclosure frameworks that require disclosure of corporate-specific financially material, decision-useful data relating to climate risks. Many of our members have for some time been voluntarily publishing sustainability-related disclosure, including climate-related information, often following leading international voluntary frameworks and standards, including the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”), the Greenhouse Gas Protocol, the Sustainability Accounting Standards Board standards, the World Economic Forum Stakeholder Capitalism Metrics, and the Global Reporting Initiative standards. For example, many of our members publish disclosures indicating how climate-related issues are integrated in their governance, risk management, business models, and opportunities. Many of our members also address other sustainability-related topics as part of their disclosures. In addition, many members have been working to implement new climate disclosure regulations now required – or under development – by their home country regulators and governmental authorities.
Globally consistent approaches to climate and other sustainability disclosures are pivotal to prevent the proliferation of competing regimes that are not aligned, increasing the cost and complexity of preparation, impairing reliability, and making comparisons more time consuming and confusing for users. Towards that end, we support the development of standards that are based on a global baseline of common cross-industry and industry-specific metrics, as well as common methodologies underpinning such metrics.
Standards should provide a clear roadmap to jurisdictions and companies, as they evolve in defining their own rules and approaches. Such roadmap should be consistent with the widely adopted Paris Accord, and Net Zero commitments taken at government and industry level. We support that, while the target should be to deal with all ESG issues, the priority is given to climate, which is the more mature area, and a clear urgency. Finally, we believe it is important that implementation of new disclosure standards finds the right balance between addressing the growing investor demand for disclosure and companies’ capacity to provide such disclosures.
Consistent with the foregoing, in order to serve as an effective global baseline (i) the standards must be clear and avoid ambiguity or uncertainty as to their requirements; (ii) the standards must be consistent with and usable for companies reporting under a variety of different local disclosure and liability regimes, including differences between regions and between mature and emerging markets; (iii) the standards should build upon and be harmonized with other established and emerging disclosure regimes addressing similar topics; and (iv) the standards should only call for disclosure that companies can accurately produce on a consistent and comparable basis, once existing data gaps have been addressed. We believe certain aspects of the Sustainability Proposal and the Climate Proposal can be better tailored to achieve those objectives, as further discussed in this comment letter.
To read the full comment letter, click here, or click on the download button below.
 GFMA represents the common interests of the world’s leading financial and capital market participants to provide a collective voice on matters that support global capital markets. It also advocates on policies to address risks that have no borders, regional market developments that impact global capital markets, and policies that promote efficient cross-border capital flows to end users. GFMA efficiently connects savers and borrowers, thereby benefiting broader global economic growth. The Association for Financial Markets in Europe (AFME) located in London, Brussels, and Frankfurt; the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong; and the Securities Industry and Financial Markets Association (SIFMA) in New York and Washington are, respectively, the European, Asian, and North American members of GFMA.
This submission reflects the views of a majority of the GFMA board members rather than those of any one member. Individual GFMA members may have views that differ from those expressed in this document.
 BPI is a nonpartisan public policy, research and advocacy group, representing the United States’ leading banks and their customers. Our members include universal banks, regional banks, and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.