By Huw Jones
LONDON (Reuters) – Proposed global sustainability disclosure rules need simplifying and phasing in to avoid fragmenting how companies report on the impact of climate change on their business, Britain’s government said on Monday.
The new International Sustainability Standards Board (ISSB) was set up last year to write global baseline rules for companies to disclose the risks and opportunities from climate change to help crack down on greenwashing or companies exaggerating their green credentials.
But the European Union and the United States have their own rules, raising concerns among international firms about fragmenting disclosures and terminology.
Martin Callanan, a junior UK minister, said he strongly welcomed the ISSB proposals, but that some will initially prove challenging for even the largest UK companies with a long history of sustainability reporting.
They would be even harder for companies in emerging and developing markets with no such experience in areas such as putting a monetary figure on risks and opportunities from climate change, he said.
Britain plans to introduce the ISSB standards for listed companies, but Callanan said that some of the proposals may prove challenging if made mandatory straight away.
“We support an ISSB standard that is comprehensive, but we must also mitigate against the risk that this will prove too challenging to adopt in full for some jurisdictions and organisations, at least initially, which could lead to further disclosure fragmentation,” said business minister Martin Callanan in a letter to the ISSB.
The ISSB will need to say which elements could apply initially and which ones could be phased in, Callanan said.
More precise definitions, language or concepts may also be necessary, Callanan said, echoing calls from EU regulators.
The ISSB is considering feedback from its public consultation before finalising the new norms.
(Reporting by Huw Jones; editing by Barbara Lewis)
