IOSCO establishes network to spur adoption of sustainable standards in emerging markets

The growth and emerging markets committee (GMEC) of the International Organization of Securities Commissions (IOSCO) has set up a network to foster the adoption of sustainability-related reporting standards.

Dr Mohamed Farid Saleh, who chairs the committee, said he was delighted that a number of emerging markets were taking “clear steps towards” using the International Sustainable Standards Board’s (ISSB) standards.

Dr Farid was speaking at a press conference to mark the launch of the network in Ankara, Türkiye, on December 18.  

Also at the event, IOSCO board chair Jean-Paul Servais said the network would provide dedicated support to regulators in jurisdictions seeking to implement internationally consistent and comparable sustainability-related disclosures.

Wide network

The network, which will be supported by ISSB and other partners to build capacity among regulators and supervisors, has 32 members from 31 jurisdictions. Collectively, its members — which include securities supervisors in China, Brazil, India, the Middle East and Africa — represent more than half of the world’s population.

Network members are at different stages in their journeys towards adopting sustainability-related corporate reporting requirements. Some are building awareness, others are planning or executing adoption road maps. Next year, Türkiye will become the first to require corporates to report using ISSB standards.

İbrabim Ömer Gönül, chairman of Türkiye’s Capital Markets Board, said he fully supported the establishment of the network. “I feel strongly that [it] will serve as a very useful platform for the exchange of views and experiences across emerging market jurisdictions,” he said during the press conference.

ISSB

In 2021, ISSB was tasked by governments at the United Nations Conference of the Parties (COP26) in Glasgow to develop environmental reporting standards to use as a baseline for compatibility by investors.

IOSCO endorsed the first two ISSB standards, S1 general and S2 climate, in July 2023. Since then, around 28 of its members have finalised adoption of the standards, with a further 28 working towards it.

ISSB chair Emmanuel Faber said stakeholders had been clear in feedback that his organisation should focus on implementing S1 and S2 over the next two years, and he praised GMEC for launching the network.

“Weʼre delighted that you took this initiative that will be of tremendous support to the new cohorts of jurisdictions that are interested in the adoption of the ISSB standards,” Faber told ISOCO yesterday.

The networkʼs capacity-building ambition follows the May publication of a guide to regulatory implementation by ISSB’s parent organisation, the IFRS Foundation.

Crucial baseline

Faber added that the ISSB standardsʼ ability to create a global baseline was crucial for the allocation of capital.

“Itʼs clear that a growing number of jurisdictions see the role that standards can bring in terms of foreign direct investments, efficiency and resilience of capital markets locally — but also as a trade tool, a tool to create accountability in the supply chains and to connect the various economic blocs in the world with the same language when it comes to sustainability performance,” he said.

The GMECʼs Farid said that supporting allocation of capital was a key driver behind countriesʼ interest in ISSB standards.

“I believe the [network] is the right approach to move forward and see the implementation part of ISSB standards,” he added. “Without implementation we would have this nice theoretical framework and theoretical documents but we would not be seeing it on the ground.”