LONDON, Feb 16 (Reuters) – The G20-backed Worldwide Sustainability Requirements Board on Thursday permitted “world baseline” guidelines for companies disclosing how local weather change impacts their enterprise, after calls to curb greenwashing in a “pivotal” 12 months for local weather reporting.
Topic to ‘balloting', or normal checks earlier than formal publication, the norms are anticipated to return into impact subsequent January to be used in annual stories for 2024 and onwards. Nations resembling Britain and Nigeria plan to undertake them.
Trillions of {dollars} have already flowed into funds touting inexperienced credentials primarily based on completely different and voluntary, private-sector approaches, elevating issues amongst regulators about greenwashing, or exaggerated climate-friendly claims.
However worldwide companies fear they may merely find yourself with a patchwork of official sector norms, given the EU and United States are additionally writing company disclosures as new environmental, social and governance (ESG) guidelines take centre stage.
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“2023 goes to be a pivotal 12 months for ESG disclosures,” mentioned Marie-Laure Delarue, world vice chair for assurance at ‘Massive 4' auditor EY.
Some 50,000 companies will apply EU disclosure guidelines referred to as ESRS, with lots of them having to reveal underneath ISSB norms on the similar time.
The ISSB and EU have come underneath heavy stress from regulators to make their climate-related disclosures “interoperable” to keep away from clashes that bump up compliance prices.
ISSB board members wrestled on Thursday over introducing some interoperability by permitting firms to discuss with compliance with EU norms to assist meet ISSB guidelines underneath sure circumstances, limiting reporting prices.
“The priority I've is, we would confuse each firms and traders,” board member Verity Chegar mentioned. “Naming Europe singly will ship the unsuitable sign that we're not actually world and inclusive.”
The board voted to incorporate use of EU guidelines in an appendix to the ISSB guidelines, provided that EU norms might change.
“I don't contemplate that having us referencing different requirements is one thing that's going to be there endlessly,” ISSB chair Emmanuel Faber mentioned.
EY's Delarue mentioned cross-referencing was a “first step in the direction of convergence” in norms, however in follow could be advanced for firms to use.
Reporting by Huw Jones; Modifying by Jan Harvey
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