By Huw Jones
LONDON (Reuters) – The International Sustainability Standards Board (ISSB) said on Monday it would publish guidance to harmonise how companies across the world publish details on their “transition plans” to meet net-zero targets.
Such plans are becoming increasingly important as companies face a series of deadlines for cutting carbon emissions in the world’s attempt to cap global warming.
They are already mandatory for listed companies in the European Union under the bloc’s corporate sustainability disclosure regulation.
Companies outside the bloc, such as in Britain, Canada and in Asia are set to apply disclosures written by the ISSB that require information on transition plans to be disclosed, if a company has such a plan.
“To support application of these disclosure requirements and to reduce fragmentation in information provided in the market, the ISSB plans to support work to streamline and consolidate frameworks and standards for disclosures about transition plans,” the ISSB said in a statement.
“The focus of the ISSB in this regard will continue to be on the provision of high-quality, decision-useful information about the plans that companies have… rather than requiring that companies engage in transition planning, per se.”
The ISSB will initially thrash out guidance based on existing private-sector best practices before considering the need to toughen up its application.
Regulators see the plans as a key, future-facing element in the wider package of climate-related disclosures.
Jean-Paul Servais, chair of IOSCO, which groups market regulators from across the world, said transition plans would benefit from consistency and comparability to aid investors.
“IOSCO is undertaking its own engagement on transition plan disclosures and is considering the role of markets regulators in promoting integrity and mitigating greenwashing in that regard,” Servais said.
The Glasgow Financial Alliance for Net Zero or GFANZ, a grouping of financial institutions, said that with 250 transition plans to be published by major financial firms this year alone, there is strong demand for a common global approach.
“The G20 should now mandate transition plans for large companies and financial institutions to help turn commitments into action and unlock the capital needed to decarbonise the economy,” GFANZ said.
Climate-related disclosures in the United States have been approved, but are facing a court challenge.
(Reporting by Huw Jones; Editing by Anil D’Silva)
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