IFRS & IFC Partner to Uplift Sustainability Reporting in Emerging Markets

A new strategic relationship between the International Finance Corporation (IFC) of the World Bank Group and the IFRS Foundation aims to enhance sustainability reporting in emerging markets and developing economies (EMDEs). The goal of this effort is to increase transparency and standardisation while strengthening the sustainable capital markets. Meeting the Needs for Climate Investment: In the upcoming years, developing economies will need to increase their financing and investment in climate change. According to IFC projections, developing countries will need to spend around $3 trillion a year by 2030 to adapt to climate change; the majority of this investment is anticipated to come from private sources. IFRS and Sustainability Standards: At the COP26 climate conference in November 2021, the IFRS Foundation established the International Sustainability Standards Board (ISSB). In order to inform investors about the sustainability risks and opportunities facing organisations, the ISSB is working to produce IFRS Sustainability Disclosure Standards. The first-ever general sustainability (IFRS S1) and climate (IFRS S2) reporting rules were announced by the IFRS in June 2023. The International Organisation of Securities Commissions (IOSCO) encouraged regulators to integrate the guidelines into their sustainability reporting frameworks after they were released. By May 2024, more than 20 jurisdictions (or around 55% of the world GDP) had either chosen to adopt the ISSB standards or were in the process of incorporating them into their frameworks. Goals of the New cooperation: The IFRS Foundation and IFC's cooperation will prioritise encouraging and developing the necessary resources to ensure that the IFRS Sustainability Disclosure Standards are used consistently throughout EMDEs. Initiatives including the creation of toolkits, research articles, and training courses will be used to accomplish this. The alliance will also offer specialised support and technical assistance to help countries adopt and apply the standards in an efficient manner. Encouraging Global Sustainability Reporting: The goal of this partnership is to improve the standard of financial reporting connected to sustainability and climate change globally, particularly in EMDEs. Through the agreement, investments will be facilitated and EMDEs will be assisted in integrating into the global movement towards sustainable finance by bringing organised and trustworthy sustainability information to the forefront of international markets. In order to make sure that EMDEs are not left behind in the global shift towards sustainable finance, the IFRS Foundation and IFC are expected to work together to advance sustainability reporting standards and transparency.