New European sustainable finance strategy gives hints on mainstreaming sustainable finance through global standards and frameworks

CDSB welcomes the Renewed Sustainable Finance Strategy and the EU’s intention to contribute to the development of ambitious reporting standards in Europe and beyond, building on the recommendations of the Task Force on Climate-Related Financial Disclosures.

Under this new strategy and in close collaboration with relevant international fora, initiatives and standards setters, the EU has the opportunity to significantly contribute to the elaboration of global sustainable finance standards and frameworks on sustainability disclosure.  

CDSB commends the commitments from the G7 and key jurisdictions throughout the world on sustainable finance and mandatory corporate disclosures in the runup to COP26 later this year. The European Union has been one of the leading voices in these debates and has already initiated the update of its corporate reporting rules under the Corporate Sustainability Reporting Directive last April. 

We are encouraged to see in the strategy the willingness of the EU to contribute and build on global developments in this space, including on global sustainability reporting standards, which are needed to ensure that sustainability risks are adequately considered in global financial markets. In this respect, the involvement of the EU in international fora, including the Financial Stability Board or the International Platform on Sustainable Finance, will be key to move towards further harmonisation of sustainable finance frameworks, standards and tools. 

CDSB is also encouraged to see the holistic approach taken by the strategy to tackle all sustainability matters, beyond climate change and social issues. This includes planned extensions of the Taxonomy regulation, further reporting requirements, as well as the foreseen publication of a study on risks stemming from biodiversity loss within the European financial system.  

Mardi McBrien, Managing Director, CDSB said: “European leadership on sustainable finance and corporate reporting is welcomed as further actions to fight climate change, biodiversity loss and rising inequalities become even more of a necessity while economies recover from the COVID-19 crisis. As a global organisation and a member of the IFRS Foundation technical readiness working group providing observations to support the establishment of an International Sustainability Standards Board, CDSB believes that global standards and frameworks are needed and can accommodate different policy requirements and objectives that jurisdictions are embracing in the race towards net zero.”    

Michael Zimonyi, Policy & External Affairs Director, CDSB said: “CDSB will continue to engage in the shaping of Europe’s sustainable finance agenda, three years after the first sustainable finance action plan. It will be important to ensure that the different policy initiatives, including reporting requirements can be applied in a consistent way and reflected both within the sustainability but also the financial reporting of companies, under the double materiality approach.” 

Ravi Aberwardana, Technical Director, CDSB said: “This second strategy builds on some of CDSB’s thinking and work at the moment, including on the reporting of climate within financial statements using international financial reporting standards, the coverage of the “S” in ESG within CDSB’s Framework and related reporting on socially material financial issues, the focus on biodiversity and natural capital loss beyond climate change and the reporting element of the Taxonomy Regulation.”   

 

To discuss some of these issues, CDSB will host a webinar on “CSRD in review: what is next for companies?” on 28 July. Register here 

About CDSB 

The Climate Disclosure Standards Board (CDSB) is an international consortium of business and environmental NGOs. We are committed to advancing and aligning the global mainstream corporate reporting model to equate natural and social capital with financial capital. 

We do this by offering companies a  framework for reporting environment- and social-related information  with the same rigour as financial information. In turn this helps them to provide investors with decision-useful environmental information via the mainstream corporate report, enhancing the efficient allocation of capital. Regulators have also benefited from CDSB’s compliance-ready materials. 

Recognising that information about natural, social and financial capital is equally essential for an understanding of corporate performance, our work builds trust and transparency needed to foster resilient capital markets. Collectively, we aim to contribute to more sustainable economic, social and environmental systems. 

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