Editorial

Despite the inevitable focus for those working in the field of financial reporting and regulation on the impact of the pandemic, other issues and initiatives requiring attention are also emerging. One of the most significant concerns corporate reporting on sustainability. The Trustees of the IFRS Foundation have launched an open consultation to ask stakeholders whether they should expand the range of the Foundation’s activities by establishing a new Sustainability Standards Board, which would sit alongside the IASB. Their short document sets out the main arguments that have led them to this question, and the reasons they consider that, desite a number of players already working on this topic, they would be well placed to take on the work. However, it also identifies a number of requirements that they would need to satisfy before deciding to expand their responsibilities. One of the criteria is that they should find sufficient support from public authorities, global regulators and stakeholders, including companies and investors in key markets. The consultation should help the Trustees assess the level of support for the proposal. It seems probable they believe the feedback will be positive, since otherwise it is unlikely that they would have taken this bold step. However, it is far from clear that all public authorities will support the initiative. For example, the European Commission has recently begun to explore the possibility of creating European standards. While this action might be partly motivated by a perceived need for leadership in this area, having started down the path, the Commission may be reluctant to stop its efforts and pass sovereignty over non-financial reporting, as well as financial reporting, standards to the IFRS Foundation. Other international regulators may also have mixed views about the matter; for some, their willingness to support the IFRS Foundation may be linked to broader issues such as their jurisdiction’s stance on measures to reduce climate change. This month’s edition includes the first of two articles on this important new development.