Principles for Responsible Investment Statement
The United Nations Principles for Responsible Investment (PRI) releases a statement calling on jurisdictions around the world to adopt ISSB standards.
The statement is jointly issued by PRI, London Stock Exchange Group (LSEG), United Nations Sustainable Stock Exchanges initiative (UN SSE), and World Business Council for Sustainable Development (WBCSD). It is signed by 120 investors, companies, industry associations and stock exchanges.
Related Post: ISSB Releases IFRS Sustainability Disclosure Taxonomy
Background of PRI Statement
PRI believes that the global net-zero transition requires efficient allocation of funds and management of sustainable risks and opportunities, and how to obtain sustainable data is crucial. Good sustainable data can serve companies, investors and financial institutions, and improve the transparency and credibility of information disclosure.
Although the importance of sustainable data is well known to the market, 40% of the world’s 4,000 large listed companies still do not disclose carbon emissions data. The International Sustainability Standards Board (ISSB) has established a global benchmark for sustainable information disclosure for the market to improve data consistency. IFRS S1 and IFRS S2 developed by ISSB are based on the framework of the Task Force on Climate-related Financial Disclosures (TCFD) and have been recognized by the International Organization of Securities Commission (IOSCO).
Contents of PRI Statement
The United Nations Principles for Responsible Investment calls on jurisdictions around the world to commit to fully adopting ISSB standards by 2025 in order to reduce the burden of corporate disclosure and provide stakeholders with consistent sustainable information. Jurisdictions can consider the following principles when formulating sustainable information disclosure requirements:
- International Coordination: ISSB is already working with jurisdictions to ensure that sustainable information disclosure is interoperable. The United Nations Principles for Responsible Investment recommends that regulators in various jurisdictions strengthen communication with the ISSB and focus on key climate standards such as transition plans.
- Economy-wide Scope: Both listed and unlisted companies should comply with a set of sustainable information disclosure standards, which can be classified according to the size of the company rather than how they obtain funding. The United Nations Principles for Responsible Investment recommends that each jurisdiction establish a clear coverage of the ISSB guidelines to ensure consistency across the economy and accelerate decarbonization.
- Timely Implementation: In recent years, investors have been calling for a globally consistent standardized information disclosure framework to help financial markets take action. The world is currently behind schedule in achieving the goals of the Paris Agreement and other sustainable development goals, so regulators need to act quickly to remove market barriers. The United Nations Principles for Responsible Investment recommends that policies in various jurisdictions be implemented no later than 2025.
Reference:
Joint Statement from LSEG, PRI, UN SSE and WBCSD on ISSB Standards
