“Business investments come only with clear criteria” – Corriere.it

“Business investments come only with clear criteria” – Corriere.it
“Business investments come only with clear criteria” – Corriere.it
from Francesca Basso

The Economist: This is how we are setting global standards for the green transition

For the green transition to be successful, public funds are not enough, private individuals must be involved but investors need to understand where they can safely put money to contribute to this transformation. For this we have created l’International Sustainability Standards Board which will define global reporting standards for climate risks for businesses: a kind of revolution for corporate accounting. concrete the economist Lucrezia Reichlin, lecturer at London Business School e trustee (trustee member) of the IFRS Foundation, an independent organization established to develop a single set of globally accepted accounting principles. The financial reporting standards that the IFRS foundation has developed so far are used in 140 countries and yesterday in Glasgow at Cop26, where Reichlin was present, the new ISSB board was launched.

Why is it important to have global standards?

The green transition needs large capital but financial markets need to assess the risks and opportunities for individual companies that arise from environmental, social and governance issues, as these affect corporate value. Investors want global sustainability disclosure standards that meet their information needs. So far we have witnessed voluntary reporting guidelines from businesses. These global standards will make it possible to calculate the true value of the company because they will take into account the negative external aspects. So the investor can put the money where there green transition – that not only the energy transition, the economic model must be transformed – it happens correctly.

When will the new standards be ready?

for two years the Ifrs foundation has been carrying out consultations with various people stakeholder on the need for global sustainability standards, he has also worked on technical standards so there is already a working basis. The board, which is independent, should arrive at the definition of the new standards in the second half of 2022. The headquarters of the ISSB will be in Frankfurt, while for America it will be in Montreal and an office in Asia, Tokyo or Beijing is being evaluated.

What information is important for the market?

There are several parameters that an investor must keep in mind. It is not just about understanding how much a company is doing to contribute to the fight against climate change but also how sustainable it is in this transition. So the information on CO2 emissions which produces a company, but also fundamental to report theimpact of risks climate transition and physical risks: for example, what happens if a CO2 tax is introduced, or if it has plants on the coast. Companies will be asked to explain how these types of risks will affect their business strategies. Capital is now global and therefore global standards are needed.

The EU has presented the green taxonomy, which also includes a new directive on corporate communication on sustainability. Will the two systems talk to each other?

We are working in partnership with the European Union for global standards. The goal is greater transparency.

November 3, 2021 (change November 4, 2021 | 08:26)


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