The Carbon Disclosure Project, a U.K.-based group whose environmental disclosures are used by over 18,700 companies, plans to incorporate the International Sustainability Standards Board's upcoming climate-related disclosure standards in its platform.
The ISSB announced the move Tuesday during the United Nations' COP27 climate change conference in Egypt. The climate disclosure standard is still being finalized after the ISSB issued an exposure draft earlier this year, along with a proposed general sustainability disclosure standard.
The International Financial Reporting Standards Foundation formally launched the ISSB during the UN's COP26 climate conference in Scotland last year as a way to bring together various environmental, social and governance standard-setters. During that conference, the CDP-affiliated Climate Disclosure Standards Board announced it would be consolidated into the ISSB by the middle of this year.
"The ISSB is committed to delivering an effective, efficient disclosure eco-system for global capital markets, resulting in decision-useful climate-related disclosures," said ISSB chair Emmanuel Faber in a statement. "By aligning the CDP platform to the ISSB's climate-related Standard, we are reducing the burden on entities and moving a step closer to that common language for disclosures. With the demand for robust disclosure as strong as ever, we are delighted that 18,000 preparers will be voluntarily disclosing data structured to IFRS S2 from the 2024 disclosure cycle."
The move could provide more widely comparable ESG information after widespread complaints by environmental advocates about "greenwashing" in the amount of carbon reductions claimed by companies.
"As the only global environmental disclosure platform, with over 18,700 companies worth half of global market capitalization disclosing in 2022, CDP is uniquely positioned to scale the early adoption of the ISSB's climate standard across the global economy," said CDP founder chair Paul Dickinson in a statement. "This will be critical in boosting corporate action and accountability, providing financial markets, governments and regulators with clear, comparable data to inform their decision making."
The ISSB climate standard, when it's finalized, will be incorporated into the CDP's existing questionnaires, which are issued to companies annually on behalf of 680 financial institutions with over $130 trillion in assets.
"I welcome ISSB and CDP working together to bring together expertise of key actors in climate standard development and disclosure capacity building, which will strongly complement the Climate Data Steering Committee leadership in driving access and consistency of climate data and the accelerated digitisation of disclosure," said former Securities and Exchange Commission chair Mary Schapiro, who now chairs the ISSB's Climate Data Steering Committee, in a statement.
The ISSB seems to be gaining more traction, and during the COP27 conference, Faber announced the board has garnered support from over 20 accounting organizations and major firms around the world, including the Association of Chartered Certified Accountants; the Brazilian Institute of Corporate Governance; CDP; Deloitte; Environmental Resources Management; the European Accounting Association; EY; the Global Reporting Initiative, the Global Steering Group for Impact Investment; the Group of Latin American Accounting Standard Setters; the International Corporate Governance Network; the International Federation of Accountants; KPMG; the Nigerian Ministry of Finance, Budget and National Planning; the Pan African Federation of Accountants; PRI; PwC; the U.K. Foreign, Commonwealth & Development Office; the UN Department of Economic and Social Affairs; the United Nations Environment Program-Finance Initiative; the UN Sustainable Stock Exchanges Initiative; and the We Mean Business Coalition. They are joining a Partnership Framework for Capacity Building in Developing and Emerging Economies.
Deloitte expressed its support for the ISSB. "I commend the International Sustainability Standards Board for the progress it has made since being established at COP 26," said Veronica Poole, Deloitte global IFRS and corporate reporting leader in a statement. "The board membership has been finalized, the consolidation of leading sustainability-standards setters has been realized, and draft standards have been issued for consultation."
On Monday, Deloitte issued a
EY expressed its support for the ISSB and the new partnership framework. "Over the past year we have seen some significant strides forward on the journey towards unified global reporting standards for sustainability," said Matthew Bell, EY global climate change and sustainability services leader, in a statement. "The ISSB's work has been pivotal and we're delighted to support its latest efforts, with the launch of the Partnership Framework for Capacity Building in Developing and Emerging Economies. In striving for global standards, collaboration is everything, and we are proud to be a founding partner of this initiative."
