Principles for Responsible Investment (PRI) has called for economy-wide adoption of International Sustainability Standards Board (ISSB) standards by 2025, in partnership with the London Stock Exchange Group (LSEG), UN Sustainable Stock Exchanges initiative and the World Business Council for Sustainable Development.
The statement has attracted support from 120 investors and other stakeholders from across the industry including firms such as Nordea Asset Management, Legal & General Investment Management (LGIM), Rathbones and Baillie Gifford.
This comes as significant gaps remain in sustainability-related data, where research by FTSE Russell in 2022 showed out of the 4,000 largest listed companies globally, over 40% do not disclose their operational carbon emissions.
Frameworks such as the ISSB play a critical role in addressing this challenge, the statement said, as the standards establish a global baseline of sustainability information for capital markets and introduce requirements on the disclosure of key sustainability-related information.
Using the ISSB standards will build on existing progress and prompt companies to report material information on climate and other sustainability-related risks and opportunities, said the PRI, which also recommended that international coordination, economy-wide scope and timely implementation principles should be considered when developing disclosure requirements.
David Atkin, chief executive of PRI, said: “Investors need comparable and high-quality ESG data from companies to consider sustainability risks and opportunities in their investment decisions.
“The ISSB’s first set of standards are a significant step in this direction, but their success relies on adoption across global markets. This statement and investors’ widespread support for it demonstrates the high appetite for this work – it is now up to policy makers and regulators to respond to these clear calls from the sector.”
Jane Goodland, group head of sustainability at LSEG, added: “Effective policy frameworks that enable capital to be channelled efficiently are vital in supporting the transition to net zero. The ISSB standards bring much-needed consistency and reliability to corporate sustainability reporting, as well as providing decision-useful sustainability data that could unlock investment and growth opportunities in the global green economy.
“We are pleased to see so many organisations pledge their support for the adoption of these standards. We look forward to seeing this list grow and to continuing to work with policymakers and other stakeholders to promote commitment on the global adoption of these sustainability disclosure standards by 2025.”
