On 3 November 2021 during the 2021 United Nations Climate Change Conference (also referred to as COP26), the IFRS Foundation Trustees announced the creation of a new standard-setting board—the International Sustainability Standards Board (the “ISSB”).
The IFRS Foundation is a not-for-profit, public interest organization established to develop a single set of high-quality, understandable, enforceable, and globally accepted accounting and sustainability disclosure standards—IFRS Standards—and to promote and facilitate adoption of the standards. It developed the International Accounting Standards Board, which is responsible for the International Financial Reporting Standards, which is widely used by different companies in various industries worldwide.
IFRS intends “the ISSB to deliver a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make more informed decisions.” Given the existing global reach and acceptance of the IFRS Standards, there is a significant likelihood that sustainability standards published by the ISSB could rapidly become the dominant ESG and sustainability reporting standard worldwide, building on work of global ESG and sustainability standards setting organizations such as the Value Reporting Foundation, the Global Reporting Initiative, Carbon Disclosure Project, and the Task Force on Climate-related Financial Disclosures.
Taiwan has largely adopted IFRS Standards. The government is also increasingly interested in promoting ESG initiatives and investments. The Securities and Futures Bureau (an office under the country’s primary financial regulator, the Financial Supervisory Commission) recently made the following statement:
“Given that the market mechanism has been the crucial driving force to direct global investment towards sustainable development and guide companies to voluntarily attend to sustainability issues, this year’s CG 3.0 will arrange to establish a sustainability market, promoting sustainability-related products such as sustainability bonds, social responsibility bonds, and green bonds.”
Given Taiwan’s adoption of the IFRS Standards and its interest in ESG investment, we anticipate that the Taiwan government will be watching the development of the ISSB and the standards it issues with great interest. We also expect for Taiwan to adopt some or all of any promulgated ISSB standards for domestic use. We will continue to monitor this space and provide clients with periodic updates.
If you have any questions or require additional information on ESG disclosures, please contact Greg Buxton at firstname.lastname@example.org. For more information on ESG investment generally, please refer to our article here.Written January 4, 2022 By Gregory A. Buxton, Bryan Tan.