Civil society calls for impact data, Paris-aligned targets and transition plans and a holistic approach to sustainability in global reporting standards
Following a public consultation closed this summer, the International Sustainability Standards Board (ISSB) is discussing in September the results of the input received on their draft proposals for climate and general sustainability standards.
The Economy for the Common Good (ECG), together with leading expert organisations, has published a statement in which they are calling the ISSB to:
- recognise and reflect the relationship between impacts and risks in order to adequately include impact data: all sustainability risks, including climate, social and nature-related, which companies and investors are exposed to, ultimately originate from impacts and dependencies. For investors and stakeholders to understand which risks will affect companies in the future, it is necessary to understand the material sustainability matters connected with their business activities.
- provide critical forward-looking information and ensure climate-related disclosures are sufficiently granular to be meaningful: there is a significant gap in terms of reporting requirements for climate mitigation targets and transition plans in line with the 1.5°C goal of the Paris Agreement that should be addressed.
- go beyond climate and approach sustainability holistically: Rather than viewing sustainability matters as a sequential analysis, these need to be considered and managed together, taking into account the entire value chain. Nature is closely interlinked with climate mitigation and adaptation as well as resilience, and human rights concerns are often root causes and/or consequences of climate change and must be addressed as part of ensuring a just transition. At minimum, a reporting requirement on the due diligence that a company undertakes to identify and assess severe impacts on people and planet would provide relevant information for investors to understand the company’s process to determine material issues.
The signatories welcome all developments working towards the standardisation of mandatory corporate sustainability reporting and recognise the importance of cooperation and compatibility, while noting it should not come at the expense of the ambition and implementation of distinct standards. The ISSB is expected to review feedback from the consultation and issue new standards by the end of the year.
Other important voices have raised similar concerns, such as The UN-convened Net-Zero Asset Owner Alliance calling for net-zero disclosures and information on the degree of alignment with the Paris Agreement 1.5°C scenario. A joint statement by UN institutions, agencies, and associated organisations highlighted the need for “a holistic and forward-looking approach to sustainability management and disclosure”. The European Central Bank has also directly stressed that “to meet users’ expectations – any international standard should require companies to disclose not only issues that influence enterprise value, but also information on the company’s broader environmental and social impact” and reiterates the view that any international standard should cover all aspects of sustainability.
List of signatories:
Anti-Slavery International, Business and Human Rights Resource Centre, ECOS, Environmental Defense Fund Europe, Economy for the Common Good, Fair Trade Advocacy Office, Frank Bold, Global Witness, Oxfam, Publish What You Pay, ShareAction, Shift, SOMO, Transport & Environment, WalkFree, WWF.
Read the Civil Society Statement on the ISSB here