ISSB's plan to create a global baseline of sustainability reporting standards face the hurdles of complexity and political uncertainty, according to representatives from corporations, regulators and accountancy bodies at the B7 conference on sustainability reporting held in Germany in late August.
ISSB is committed to ensuring that its draft standards serve as a global baseline for sustainability reporting standards on which other jurisdictions can build with additional reporting requirements.
But Melanie Kreis, CFO at Deutsche Post AG, said that the terminology and the key KPIs had to be consistent between the ISSB standards and those of other jurisdiction in order to serve as an effective global baseline.
Martin Moloney, secretary general of IOSCO, shared Kreis's concern on inconsistencies between standards. He said that regulators need to "do everything possible not only to get common definitions but to do everything we can to try to get as much overlap and consistency of process for corporates."
CPA Canada's CEO and president, Pamela Steer, said that the biggest risk to the global baseline's success was the "regulatory and political uncertainty that will slow down the action that is so urgently required".
Cristiano Borean Group, CFO of Generali SPA, agreed with Steer's concern that political and geopolitical issues will stop the momentum for sustainability reporting around the world and prevent ISSB's standards from serving as a baseline for reporting.
"To me, the biggest risk is that we get bogged down in a tick the box compliance exercise instead of really a meaningful communication between companies and investors," Neil Stewart, director of corporate outreach at the IFRS Foundation, said.
He added: "Let's not get caught up in the complexity and make this merely a costly compliance exercise."