COP27: Sustainable standard setters close in on regulatory gap

COP27: Sustainable standard setters close in on regulatory gap

SHARM EL-SHEIKH, Egypt/LONDON - Sustainability standard setter chief Emmanuel Faber said he was hopeful of reaching in the coming weeks a "big milestone" towards aligning the European Union's corporate disclosures with his board's global norms.

Despite nearing agreement over how the work of his International Sustainability Standards Board will mesh with a similar set of EU rules being finalised, differences have persisted over what should be counted when assessing a company.

Faber, chair of the Frankfurt-based ISSB, which is looking to define a global baseline for such disclosures and make as many countries as possible adopt it, said the issue remained difficult.

The EU is finalising disclosure rules for 50,000 companies in the 27-country bloc to report on environmental, social and governance (ESG) factors, as well as a company's impact on the enviroment, known as double materiality.

Global regulators have called on the EU and ISSB to make their climate disclosures interoperable to avoid competing norms confusing cross-border investors.

"We're working with the European Commission on a shared objective of defining a framework for interoperability that will be as clear as possible for preparers (companies), and to place within that framework as much as possible of the climate standard," Faber told Reuters on the sidelines