Standard setters have an obligation to users of the information, be it investors or others, as well as to companies to work together and find alignment on their sustainability standards, according to Sue Lloyd, vice-chair of the ISSB.
Speaking during a webinar hosted by the CFA institute on 21 June, Lloyd said she had met with the EU Commission and EFRAG representatives the day before "to do a deep dive into our exposure drafts and their exposure drafts".
"I've got a team of four people working pretty much full time on trying to find ways to align our proposals with Europe's - respecting totally the European position," she said. "Europe should be admired for being thought leaders in this field for getting so much done. And the tricky thing is we got established when they were well done the path and so now we need to be creative, to find ways to get things to line again."
Lloyd said she was confident alignment would happen although "it will take work" and require to "find a way that is totally respectful of the different objectives".
The main area of opposition between the ISSB and the European standards is of course double materiality. Where the ISSB is working on investor-focused standards to disclose information that impact the long-term value creation of businesses, EFRAG under the European sustainability agenda has adopted double materiality disclosing both the impact on the company and the company's impact on the outside world.
But Lloyd noted that a lot of what investors wanted to be disclosed had changed in recent years, so much so she qualified it as a 'seachange'. Investors need might not yet go as far as what Europe has adopted, she said, but there is enough of an overlap for the ISSB to try and capture this in their standard through the notion of 'dynamic materiality' and impact on future cash flows.
People:Sue Lloyd