Britain backs global body for climate-related company disclosures

LONDON (Reuters) - Britain has backed the creation of a global sustainability standards board (SSB) to set mandatory requirements on company disclosures regarding risks from climate change.

The SSB should be set up alongside the International Accounting Standards Board (IASB) to integrate financial and non-financial reporting within a common architecture, a joint statement from Britain’s business, finance and employment ministries, Bank of England, Financial Conduct Authority, Financial Reporting Council and Pensions Regulator said on Tuesday.

It was in response to a public consultation from the London-based International Financial Reporting Standards Foundation, parent of the IASB, which writes accounting rules used in around 150 countries, including Britain.

“A transparent and robust governance structure should, in our view, be a pre-requisite for establishing an independent and impartial sustainability reporting standard setter,” the statement said.

“For these reasons, the Foundation is very well-placed to lead this conversation and work, and we are grateful that it has done so.”

Investors have called for globally comparable disclosures to stop “greenwashing”, or where firms talk a good game on responding to climate change but fail to follow through on concrete actions.

A growing number of companies are making disclosures based on recommendations from the global Taskforce on Climate-related Financial Disclosures (TCFD).

TCFD is voluntary, patchy and seen by some UK regulators as an interim step to mandatory global rules.

The IFRS foundation’s consultation is testing global appetite for global sustainability standards and whether it should play a role in developing them.

The foundation said in September it would only go ahead if there is enough public support and funding.

Reporting by Huw Jones; Editing by Steve Orlofsky