Globale standarder for bærekraftsrelatert finansiell rapportering

Vårt synspunkt om globale standarder for bærekraftrelatert finansiell rapportering.

Av: Carine Smith Ihenacho, Chief Governance and Compliance Officer, Elisa Cencig, Head of Policy Engagement and Jeanne Stampe, Lead Policy Adviser

Vårt synspunkt

  1. Bærekraftrelatert finansiell informasjon bør være basert på de globale basisstandardene utviklet av International Sustainability Standards Board (ISSB). Der andre standarder brukes, bør tilsynsmyndigheter og rapportutarbeidere sørge for at disse er kompatible med ISSB, for sammenlignbarhet på tvers av selskaper og markeder.
  2. Selskaper bør opplyse om vesentlig bærekraftrelatert finansiell informasjon som gjenspeiler bransje, geografi og selskapsspesifikke forhold. Selskaper bør opplyse om alle vesentlige miljø- og samfunnsmessige konsekvenser av sin virksomhet på tvers av verdikjeden, ettersom ulike risikoer og -muligheter kan være vesentlige eller bli vesentlige over en lengre tidshorisont.
  3. Bærekraftrelatert finansiell informasjon bør være i samsvar med og knyttet til informasjonen som oppgis i finansielle rapporter. Den bør være underlagt de samme styringsprosessene som finansiell rapportering, med endelig godkjenning fra styret. Informasjonen bør attesteres eksternt, med begrenset attestasjon som utgangspunkt.

Resten av synspunktet er tilgjengelig på engelsk.

Background and relevance 

Norges Bank Investment Management manages the Government Pension Fund Global on behalf of the Norwegian people. As a long-term investor, we consider our returns over time to be dependent on sustainable economic, environmental, and social development, as well as on well-functioning, legitimate and efficient markets. We invest in over 65 countries and require reliable, consistent, and comparable sustainability-related financial information across global capital markets. Global reporting standards are therefore critical to ensure companies disclose information that can inform our investment decisions, risk management processes and ownership activities.

While international accounting principles mandate the disclosure of all material matters, including sustainability matters where relevant, the practice of sustainability reporting has encountered many challenges. These challenges stem from the proliferation of frameworks and standards, which have different approaches to materiality, topics, scope, and metrics for reporting. Thus far, sustainability reporting has mostly been voluntary, which has resulted in a lack of complete and comparable disclosures both within and across different markets. High-quality reporting standards implemented in a consistent and mandatory manner represent a significant stride towards harmonising corporate sustainability-related financial disclosures, which will reduce informational asymmetry, enhance investor protection and, thus, foster well-functioning markets. This enables long-term investors like us to allocate capital to companies as they transition to a higher physical risk, lower carbon, and more sustainable global economy.

We strongly support the International Sustainability Standards Board (ISSB) and its mission to deliver a global baseline of investor-focused disclosure standards. We advocate for jurisdictions to work towards full adoption of the ISSB standards IFRS S1 (general sustainability disclosure standard) and S2 (climate disclosure standard). We additionally value and monitor the work of Global Reporting Initiative (GRI) for its global impact reporting standards and welcome the collaboration between GRI and ISSB to deliver full interoperability of their standards. We encourage ISSB and EFRAG to continue working together to maintain the high alignment of their standards, starting with the guidance on transition plan disclosures under development. Interoperability between the ISSB, GRI and EFRAG is crucial to facilitate cross border capital flows given the widespread use of GRI standards, especially across emerging market entities, and potential extraterritorial scoping in of entities to other jurisdictions’ disclosure requirements through their global value chains.

We work to encourage standardised, reliable, and relevant disclosures through our work both at the market and company level. At the market level we respond to consultations, engage with regulators, and participate in relevant advisory committees to contribute to standards development and adoption. At the company level, we engage with companies to encourage early adoption of the ISSB standards and further disclosures in line with our expectations, as well as regularly assessing their disclosures to inform our active ownership work. We remain focused on encouraging the reporting of material and decision-useful information, to avoid excessive administrative burden for preparers.

Key features of effective corporate sustainability-related financial disclosures

 

1. Approach to materiality, connectivity, and industry-specificity 

The ISSB standards require that sustainability disclosures cover all material information about sustainability matters that may reasonably be expected to affect a company’s prospects. This preserves the decision-usefulness of information and avoids excessive reporting burden on companies. The ISSB standards share the same conceptual foundations as the International Accounting Standards Board (IASB) financial reporting standards, with common qualitative characteristics of useful financial information such as materiality, relevance, verifiability, and comparability. The requirement for a company to report its sustainability-related financial disclosures concurrently with its financial statements will provide investors with coherent, connected, and complementary information to form a holistic view of a company’s performance and prospects over different time horizons.

A company’s assessment of what constitutes material information will largely depend on its industry and the geographical location of its activities across its wider value chain. The industry-based SASB standards have been incorporated into the ISSB architecture and provide useful guidance for preparers in identifying material sustainability matters and related disclosures. However, we expect companies to conduct their own materiality assessment which would include consideration of how sustainability risks and opportunities differ in materiality depending on geographical location, jurisdiction and time horizons.

We encourage disclosures to also include significant environmental and social impacts of the company’s operations and value chains. As regulations, consumer preferences and stakeholder expectations may change over time, these impacts may become material to a company’s prospects. Preparers may consider how they can use the GRI standards to report on these significant impacts, in particular when they form part of value chains of entities that are scoped into EU Corporate Sustainability Reporting Directive.

2. Regulatory adoption and visibility of investor-focussed disclosures 

Regulatory adoption of ISSB standards can encourage a level playing field by mandating consistent corporate disclosures across jurisdictions. Adopting the ISSB standards into the regulatory framework is the most effective way to deliver globally comparable information for investors and reduce the reporting burden for companies, particularly those with operations and value chain spanning different jurisdictions. Global standardisation of investor-focused disclosures will enable investors to accurately assess and benchmark existing and potential portfolio companies. This enhances market efficiency and supports cross border capital flows.

Timely and consistent adoption or use of the ISSB standards across jurisdictions is key to achieving high quality and globally comparable disclosures. Regulators can consider phasing in requirements and leveraging existing requirements and practices as they develop their jurisdictional roadmaps towards mandatory sustainability reporting. They can leverage on the in-built transition reliefs for more complex disclosures such as scenario analysis and Scope 3 emissions, and on permanent proportionality measures to accommodate the different capabilities and experience of preparers. Regulators should also ensure that investor-focused information required by the ISSB standards is not obscured when they introduce additional disclosure requirements or adopt interoperable standards to meet jurisdiction-specific requirements or broader stakeholder needs.

3. Governance and assurance

Sustainability disclosures should be subject to similar governance procedures as financial disclosures, with a final signoff from the board. For investors to confidently use sustainability-related financial information, it needs to be readily accessible and subject to similar quality controls as other information that companies provide to financial markets, where applicable. We support the use of the International Auditing and Assurance Standards Board’s International Standard on Sustainability Assurance 5000 (ISSA 5000) for external assurance on sustainability disclosures. Basing assurance practices on a global standard will enhance investors’ trust and confidence in sustainability-related financial disclosures across jurisdictions and help mitigate greenwashing risks.

In line with our public expectations of portfolio companies on climate change, we expect reasonable assurance for Scope 1 and 2 emissions information and limited assurance for the rest of climate disclosures. We expect sustainability disclosures beyond climate to be similarly subject to external assurance. We acknowledge that assurance of sustainability reporting has been voluntary so far, and believe that limited assurance can be a practical starting point, with an expectation that it develops to reasonable assurance over time, depending on market and policy developments.

Developments to follow

Disclosure standards and regulations are evolving rapidly, and our view may change accordingly. We will pay close attention to the following: