Lee White, executive director of the IFRS Foundation, provides update on ISSB's objectives, progress and plans for the future.
The IFRS Foundation operates in the public interest for high quality standard setting focused on making sure, importantly, that they are globally acceptable. We established the ISSB 12 months ago to develop sustainability standards, and provide a global baseline, which really is such a key objective to meeting the information needs for investors, ensuring that we get to a level of comparability because information globally is presented in a consistent manner.
In line with the global baseline, we also use a phrase around the building blocks and here our aspiration is that we recognize that jurisdictions and other key stakeholders will want information that isn't necessarily aligned exactly to the investor's needs. And so, with the global baseline in place for investors, jurisdictions are able to add their own specific requirements to that baseline.
Ad hoc, we released two documents, at that time known as prototypes. Greater work has been done since that time and we're right in the process of our consultation being completed. The board is now considering the remarks, the comments, the views put forward through consultations right at this time.
All the board members have now been appointed and so we've got a fully functioning board. Advisory groups, that we indicated were so important to ensuring that the board was well informed, are all in place but we're finalizing membership on some of those.
There used to be a reference to 'an alphabet soup' of different acronyms for all the iniatives in that space. Importantly, at COP, we announced we were trying to consolidate and bring a level of clarity to that positioning. Since that time, both the CDSB and the VRF have all been now legally consolidated into the IFRS Foundation. That's all the intellectual property, so all of the standards, the guidance, the research materials that have been produced by those organizations, are now with the ISSB. Also, all of the talent and the skills that were in those organizations have transferred across to us as well and that allows us to have that strong running start.
We indicated we would have a global footprint and we are in the throes of doing that. We now have offices in Frankfurt, Montreal, San Francisco, Japan and we have a base here in London as well. We're still to finalize the full footprint, we need to think about how we're positioned further in Asia and look towards Africa as well but already we can see the main function parts of the ISSB in place.
Importantly, we recognize that jurisdictions are already moving at pace, and we formed a jurisdictional working group. At the moment, that comprises of Europe, the United States via the SEC, Japan, China and the United Kingdom. And that group has now met three or four times in order to make sure that the board is informed of the activities those countries/regions are taking, and vice versa, so that we can see the formation, ideally, of that global baseline.
We want to make sure we've got a mechanism in place to allow other countries to participate and the Sustainability Standards Advisory Forum will have up to 16 countries involved.
If the ISSB is focused on the investor needs, then where does that fit with the GRI, multi stakeholder approach? We've put in place an MOU with the GRI and the ISSB and the GRI board are working closely in terms of how their program of activities will shape. And this really brings to life two pillars of reporting, investor focus is coming through from the ISSB and multistakeholder is coming through with the GRI.
The general requirements standard, otherwise known as S1 is really trying to capture all of the material information pertaining to significant risks and opportunities of sustainability nature. As we've crafted out this exposure draft, it's somewhat akin in the financial reporting side to IFRS 1. It's an overarching type of standard that will be there to refer to, capturing all general matters.
With climate, this is a very specific exposure draft. Importantly here, this is really built fundamentally on the work and the architecture of TCFD, and we know TCFD created significant momentum since it was first released, and so we see this as a natural next phase post-TCFD. It does include some SASB materials as an appendix and that's really industry specific requirements. It requires disclosure of physical transition, and also climate-related opportunities.
So I mentioned about the exposure drafts were released, we kept our promise at COP 26 that it will be done in Q1.. It was open for 120 days consultation, which closed at the end of July and since then we've been working really hard to get through and provide the analysis necessary. A lot of that analysis is actually being considered by the board this week. We received 1,400 responses overall and we tried to make sure we have a global outreach, to aggregate understandings.
Scalability has been a key point of feedback because the SME community, in many jurisdictions, fulfill a very large chunk of the economy and therefore we've got to make sure there's a level of scalability to what's produced by the board to bring everyone along and have that global baseline.
A lot of the feedback has come back asking for more clarity, guidance and examples on many of the terms and phrases and concepts that were presented.
S2 was very well received, in particular it got a lot of support because we used TCFD in effect as the basis for its architecture. Again, more guidance and more implementation information required, more examples required so that people can truly understand all that's being required in the standard. And around scalability, also this desire around proportionate reporting requirements.
We will ideally, get this completed by the end of this calendar year and then issue the standards as promptly as we can in 2023. We are trying to work this balance between this sense of urgency and making sure that our transparency and our due process of consultation is valued.
And importantly, capacity building: This is something that is right at the heart of making sure that if we think about something like climate, it's a global issue and we've got to find ways in which all jurisdictions can come along on the journey with us. We think we've got an incredibly important role to play in capacity building
Important aspects going forward, is that IOSCO will assess through their own processes whether it will endorse the standards. Also there is an important work that is just starting on standards to provide assurance on this information.
This is an edited transcript of the spoken speech