“In a Gentle Way You Can Shake the World”

Kristina Wyatt's Full Disclosure Newsletter
By Kristina Wyatt
May 4, 20223 min read
August 4, 2022, 7:39 PMUpdated
May 4, 2022Updated: August 4, 2022, 7:39 PM3 min read

ISSB Announces Working Group for Enhanced Cross-Jurisdictional Compatibility

Last week, the newly formed International Sustainability Standards Board announced a working group to enhance the compatibility of sustainability reporting initiatives around the world. The working group includes the Chinese Ministry of Finance, the European Commission, the European Financial Reporting Advisory Group, the Japanese Financial Services Authority, the Sustainability Standards Board of Japan Preparation Committee, the United Kingdom Financial Conduct Authority and the US Securities and Exchange Commission. It hopes to foster dialogue across the international community on key sustainability disclosure issues. 

The ISSB hopes to bring current proposals together, for example the US SEC’s and the European Financial Reporting Group’s (EFRAG), in order to align as closely as possible on a global climate disclosure baseline while the three consultation periods are still open. The ISSB has asked for feedback from the public as well as the working group to promote alignment “at a jurisdictional and international level to deliver the global baseline that has been welcomed by public authorities and market participants.”

With this development also comes a new advisory body, the Sustainability Standards Advisory Forum, coming into effect next quarter to facilitate this cross-jurisdictional effort. 

This effort by the ISSB and the progress it has made to date are remarkable and reflect deft diplomacy. Unlike national jurisdictions that have the power to compel compliance with their rules, the ISSB can only set standards that can be adopted by countries or by companies on a voluntary basis. It carries a gentle feather rather than a big stick.

As such, its power will be in its ability to pull countries in by defining a common purpose and a common reporting baseline that can be embraced broadly. Jurisdictions are free to build on the ISSB baseline - in fact the IFRS Foundation described the ISSB’s approach as one of establishing disclosure building blocks. 

Given the dynamic nature of sustainability reporting, as reflected in the sea of changes we have witnessed over the last year, the ISSB stands to play an important role in developing standards that can evolve with changing market conditions and investor needs. Its approach so far has revealed a desire to forge agreement among key jurisdictions and other stakeholders. Its standards are likely to take hold because of the care applied to their development.

If they serve investor needs and reflect consensus regulatory reporting practices, they are likely to provide a path to harmonized reporting. This will benefit investors and issuers alike. I’d say they are off to a good start! 


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Wyatt joined Persefoni from the U.S. Securities & Exchange Commission (SEC), where she served as Senior Counsel for Climate & ESG to the Division of Corporate Finance, led the rulemaking team through drafting proposed climate disclosure regulations, and worked closely with the Office of International Affairs.


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