PensionsEurope supports changes to IFRS Foundation Consultation

PensionsEurope supports the proposal to amend the IFRS Foundation Constitution, which would enable the creation of a new sustainability standards board under the governance of the foundation.

In response to the IFRS Foundation Consultation, the association said broadening the scope of the IFRS to include non-financial / sustainable reporting standards is a step in the right direction both from the perspective of international companies as well as pension funds.

“Considering that the IFRS sets international accounting and reporting standards, this can ensure comparability in this area between different jurisdictions. PensionsEurope believes that the current fragmentation is confusing and extremely complex,” it noted.

Therefore, there is an “immediate need” to improve the consistency and comparability of sustainability reporting. Ideally, PensionsEurope advocates for the development of the environmental, social and governance (ESG) reporting internationally and at all levels of the economy to fulfil the existing data gap.

The proposed amendments to the constitution can enable IASB, as the international point of reference for accounting and reporting, to execute efficiently this specific role and become equally the point of reference for non-financial reporting. PensionsEurope said it is satisfied that the process is overseen by the trustees, who are in turn accountable to a monitoring board of public authorities.

“Its membership includes IOSCO, the European Commission, the US Securities and Exchange Commission and others. To us, it is crucial that the G7 countries actively participate in the development of non-financial / sustainable reporting standards. In general, PensionsEurope is in favour of the establishment of a global baseline of sustainability-related disclosure standards to meet investor needs, which would be made available for use by jurisdictions as a base for public policy needs.”

“This approach would provide global comparability for investors in a way that allows jurisdictions to combine the international standards with their own additional requirements. However, the EU is currently taking the lead on ESG data with the SFDR and the CSRD. As a result, PensionsEurope feels that the European experience could be used to influence the content of the future international workstreams. To conclude, PensionsEurope welcomes the initiatives and the proposed amendments and will continue monitoring the new relevant developments and initiatives,” it commented.

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