As COP26 drew to a close, we picked out two highlights to watch, the historic agreement between the US and China to cooperate on reducing carbon emissions and the launch of the International Sustainability Standards Board (ISSB). Here we look in more depth at the ISSB and how it could support businesses to deliver on sustainability.
In the aftermath of COP26, it is more apparent than ever that environmental change can't just come from nations but from businesses too. With the recent revelation from the conference that fossil fuel delegates outnumbered any other attending country, the importance of the entire private sector coming together and taking action is evident.
Enter the International Sustainability Standards Board (ISSB), a new initiative courtesy of the International Financial Reporting Standards (IFRS) dedicated to ensuring that businesses are able to provide transparent and informative updates regarding their efforts to improve sustainability.
Why is the ISSB important?
With COP26 concluded, it is easy to see that there is a lot of work to be done. Many people are concerned that the actions and pledges taken by countries will not be enough to avert the dangerous consequences of global warming exceeding 1.5 degrees. With that in mind, providing solutions and the information necessary to achieve them is essential. The ISSB is designed as a way for businesses to inform and be more transparent with their clients about what steps they are taking towards sustainability, and how successful they have been.
As part of the announcement, the IFRS have further detailed why this board is necessary, and furthermore what the benefits will be. They highlight the importance of international investors being kept updated on businesses they are connected to. With a focus on sustainability disclosure standards, the ISSB promises to be a key influence in developing business sustainability in the coming years, if for no other reason than their progress and standards being more publicly available.
What makes the ISSB different?
The ISSB is specifically designed to improve the sustainability of businesses and ensure they are held accountable. It is designed to improve global financial markets and build off of already-existing initiatives to consolidate efforts and ensure the process is as efficient as possible. It is a separate entity from national and government efforts, designed as a global initiative but with different targets. With that in mind, the question then becomes; what can businesses do to meet the requirements of the Standards Board?
How can companies measure sustainability impact?
It is important to adapt to the coming changes laid out both by the ISSB and COP26 itself, as practices that may still be profitable now will fall off in the coming years; being prepared for the next wave of business practice is essential.
As has been our philosophy since SDG Changemakers was founded, the key to any company improving sustainability is to follow the SDGs and treat them not only as an end goal but a framework from which to build solutions.
The ISSB is a result borne of the necessity for businesses to work towards the SDGs in a consistent and profitable way; and the fact that they are a significant contributor towards sustainability efforts, capable of deciding a nation's progress towards the Sustainable Development Goals. SDG Changemakers was founded because we also recognise the importance that businesses will have in the coming years. We offer advice, frameworks, workshops and other methods to our clients that allow them to prepare their companies for a more sustainable future. Tackling the gender pay gap, monitoring waste reduction, using green energy providers, impact measurement and digitisation are also ideal ways to begin the sustainable journey so that your business is ahead of the curve.
Alongside these ideas is the Voluntary Sustainable Standards Database; a comprehensive list of over 300 standards for different sectors that can help companies on their sustainability journey.
What are our thoughts?
The ISSB is a step in the right direction for businesses. Its objective of creating high-quality sustainability disclosure standards that meet the information needs of investors will help businesses and consultancies alike, with the former being given the tools to adapt and the latter the information to help them do so. It has always been our motivation to help businesses become more sustainable, both for the wider impact it will have and for the profitability of such adaptations. As sustainability consultants focused on business and social enterprise growth, we believe this move to create guidelines for internationally recognised sustainability standards is imperative to ensure investors are comparing like with like, and are confident of robust data being used to make important sustainability claims.
What the ISSB offers is more than a half measure, and it's one that we intend to push further on our end as a consultancy. Consumer preferences combined with what may be required of businesses in future makes it all the more essential to transition towards sustainable business, and we want to aid as many companies as possible in making that transformation.
In this decade of action, there is much work to be done - governments and world leaders know what they have to do, but small businesses, SMEs and corporate foundations can all make contributions towards a sustainable future.
To learn more about what SDG Changemakers do and how we support organisations like yours, get in touch.