The new committee for green and sustainable accounting standards will have its headquarters in Frankfurt, but will be headed by a French.
As the IFRS foundation, which is responsible for international accounting rules, announced on Thursday, the French manager Emmanuel Faber will be head of the ISSB Council for Sustainable Accounting.
Mark Fehr
Editor in business.
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On the occasion of the world climate summit COP 26 in Glasgow at the beginning of November, the IFRS Foundation announced that the green accounting council ISSB will have its headquarters in Frankfurt.
The ISSB is being set up as a sister organization to the IASB, which is responsible for traditional financial accounting, and aims to create uniform standards according to which international companies disclose the consequences of their business for the environment, climate and society.
New goals besides profit
According to the ideas of politicians and investors, companies should no longer only strive for sales and profits, but also promote environmental protection and the common good. These new goals are summarized under the term ESG for the environment, social affairs and good corporate governance. They play an increasingly important role in the decision of large investors or lenders, which companies and business models they make capital available or withdraw. For example, Commerzbank recently announced that it would no longer enter into new business relationships with customers who generate more than 20 percent of their sales or electricity generation with coal.
The IFRS Foundation emphasizes that the French Emmanuel Faber already underlined the importance of sustainable corporate figures for the capital markets during his time as the former head of the international food company Danone. For example, Danone introduced innovations under Faber's leadership in order to make investors or lenders understand the impact sustainability has on company value. As Erkki Liikanen, the chairman of the IFRS Foundation and former Finnish central bank president, explained, Faber is the ideal person for the first chief position of the green accounting committee ISSB. According to Faber, the ISSB now has the unique opportunity to meet investor needs for high-quality and internationally comparable information on sustainability.
Faber will take over the management of the ISSB on January 1, 2022.
The ISSB is expected to publish initial drafts of green accounting rules within the first quarter of next year, on which companies, investors or other practitioners can comment.