Finance + Sustainability: The Platinum Jubilee and why we are still facing the same sustainability challenges 70 years on
As many around the UK return to work having celebrated the Queen’s Platinum Jubilee, it is with interest that I took a trip back in time to see what the key events were in 1952 when the Queen came to the throne. What is striking is the parallels between now and then relating to matters of an environmental and military nature are striking.
In December 1952, the Great Smog of London blanketed the city for five days, with an estimated 4,000 people losing their lives as a result of breathing in the fatal pollution. During this time NATO was looking to expand its membership with Greece and Turkey ultimately becoming members. Fast forward 70 years and climate change has become an existential threat to the human race and more countries such as Finland and Sweden are looking to join NATO.
Focussing specifically on climate change and the wider sustainability agenda, in recent months developments in the arena of sustainability reporting have been moving at pace. The importance of having the right sustainability disclosure standards cannot be underestimated as we seek to restrict global warming to 1.5°C above pre-industrial levels.
First out of the starting blocks was the recently established International Sustainability Standards Board (ISSB) which published its first two exposure drafts covering general sustainability disclosure requirements and those specific to climate change. The consultation on these is open until 29 July.
Not far behind and certainly much more comprehensive in their scope at this stage, came the suite of proposed reporting standards issued by the European Financial Reporting Advisory Group (EFRAG) to support the disclosure requirements to be established in the Corporate Sustainability Reporting Directive (CSRD). These proposals are out for comment until 8 August. The CSRD i#s currently at the trilogue stage with some matters still to be resolved including what actors will be able to provide assurance on the required sustainability disclosures.
EFRAG has also helpfully published a comparison of its proposed standards versus those of the ISSB. However, an important omission would appear to be a comparison of both standards with those of the Global Reporting Initiative. According to the IFAC State of Play report published in 2021 the GRI’s standards were the most commonly used by corporates across the globe.
The SEC in the US also currently has a proposed rule change which will require companies to report extensive climate-related disclosures in their filings.
Where will this all end up – we will just need to wait and see. ICAS will of course be responding to the ISSB and to the elements of the suite of standards proposed by EFRAG. We are also highly supportive of the work currently being undertaken by the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA).
ICAS has been proactive in exploring the considerations around sustainability reporting, with our Sustainability Assurance Working Group recently published reports on sustainability assurance and the conditions necessary for the reporting of high-quality sustainability information.
As we reflect on the Queen’s reign, and indeed on the history of the planet, things generally work out well when we all seek to work together for the better of the planet. That is why in relation to the recent DAVOS summit, whether or not you agree with flying lots of people from all over the world to the Swiss Alps on private jets to talk about sustainability, it’s hard to argue with its convening power at a time when we urgently need people with their hands on the levers of power to make some decisions,
We can but hope.