Global blueprint for climate disclosures by companies due in September

LONDON (Reuters) - An international accounting body said on Tuesday it would set out a definitive proposal in September for global rules to govern company disclosures of risks from climate change.

FILE PHOTO: Birds fly over a closed steel factory where chimneys of another working factory are seen in background, in Tangshan, Hebei province, China, February 27, 2016. REUTERS/Kim Kyung-Hoon/File Photo/File Photo

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

“Given the growing and urgent demand, the intention would be for the trustees to produce a definitive proposal, including a roadmap with timeline, by the end of September 2021,” the IFRS Foundation said in a statement.

This could then lead to an announcement on creating a global sustainability standards board during the United Nations Climate Change Conference COP26 in November, it added.

The foundation is the umbrella body for the International Accounting Standards Board (IASB), whose rules are used in around 150 countries, including Britain and the European Union, but not in the United States.

The London-based foundation suggested last year that a sustainability standards board or SSB could be set up alongside the IASB and run along similar lines.

First, however, it wanted to test the appetite - and potential funding - for such a project, and held a public consultation.

“The responses indicate growing and urgent demand to improve the global consistency and comparability in sustainability reporting, as well as strong recognition that urgent steps need to be taken and broad demand for the IFRS Foundation to play a role in this,” it said.

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.

Reporting by Huw Jones; Editing by Kevin Liffey and Susan Fenton