IOSCO Launches Network to Support Adoption of ISSB Sustainability Reporting Standards in Emerging Markets

IOSCO, the leading international policy forum and standards setter for securities regulators, announced the launch of the GEMC Network for Adoption or Other Use of ISSB Standards, a new network aimed at supporting the adoption and use of the IFRS Foundation’s sustainability reporting standards in emerging markets.

The launch of the new network follows the release last year by the IFRS Foundation’s International Sustainability Standards Board’s (ISSB) inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023, aimed at providing standardized and globally consistent information to investors about companies’ sustainability risks and opportunities.

Following the release of the standards in 2023, IOSCO called on regulators to incorporate the standards into their sustainability reporting regulatory frameworks. To date, 30 jurisdictions representing nearly 60% of global GDP have taken action to adopt or otherwise use ISSB Standards.

According to IOSCO, the new network aims to support jurisdictions, primarily in emerging markets, in their adoption of the ISSB standards, including by providing assistance in building local capacity, and a platform for advancing information sharing at a regional level

The new network will include both jurisdictions already in the process of adoption as well as those considering adoption. At launch, the network will include IOSCO Growth and Emerging Markets Committee (GEMC) members, representing 31 jurisdictions, including China, Brazil and Mexico. Overall, launch members represent more than 90% of BRICS economies GDP, nearly half of Africa and Middle East GDP, and more than two thirds of Latin America and the Caribbean’s GDP. IOSCO said that more jurisdictions have expressed interest in joining. Key areas of interest expressed by members for the network include building capacity on supervisory and enforcement aspects of ISSB Standards, setting up deep dives to discuss and understand how the Jurisdictional Guide and other educational materials can support adoption, and helping to assess market readiness.

Jean-Paul Servais, Chairman of the IOSCO Board, said:

“We have seen a strong interest from our Growth and Emerging Markets members wanting to introduce the ISSB Standards into their respective regulatory frameworks. These members are willing to implement international standards that enhance international consistency and 3 comparability of climate-related and other sustainability-related disclosures for investors.”

The IFRS Foundation recently announced its own initiative to help improve sustainability reporting in emerging markets and developing economies (EMDEs), with the launch of a partnership with the World Bank Group’s International Finance Corporation (IFC), focused on implementing programmes to promote and build capacity for the consistent application of the IFRS Sustainability Disclosure Standards across EMDEs.

In a statement released following the announcement, ISSB Chair Emmanuel Faber welcomed the launch of the new network, noting that it will help companies in emerging markets to “align their sustainability-related disclosure requirements with the global baseline, connecting them to global capital pools and investors seeking new investment opportunities.”

Faber added:

“This progress is also important to all other jurisdictions because multinational companies with global supply chains will stand to benefit from the availability of comparable data and disclosures from across the value chain and such disclosures will facilitate trade.”