FSB's latest report shows 80% of global financial regulators are aligned with ISSB and TCFD standards, though challenges remain, particularly for SMEs and emerging markets in fully implementing these frameworks.
A recent Financial Stability Board (FSB) report reveals that 80% of global financial regulators are now aligned with the International Sustainability Standards Board (ISSB) and the Task Force on Climate-related Disclosures (TCFD) recommendations. The report highlights significant progress in the adoption of climate-related disclosure standards across FSB member jurisdictions.
As of 2024, 19 out of 24 FSB member jurisdictions have implemented climate-related disclosure regulations or guidelines, with 17 jurisdictions fully aligned with ISSB standards and TCFD recommendations. However, despite this progress, a gap remains in fully meeting all 11 TCFD recommendations, with only a small fraction of global companies reporting in full. This suggests that crucial data on climate governance, strategy, risk management, and metrics is still lacking, making it difficult for investors to properly assess climate risks and opportunities.
Emmanuel Faber, Chair of ISSB, stated, “This progress report underscores the significant and encouraging progress in disclosure of climate-related information. But further action is needed to address the fact investors are still not receiving the information they need to assess and price appropriately climate and other sustainability-related risks and opportunities.”
Efforts are now focused on supporting jurisdictions in integrating the ISSB standards, especially in emerging markets and small- and medium-sized enterprises (SMEs). The FSB’s report calls for continued capacity-building initiatives to ensure these groups can successfully adopt these frameworks.
Faber further emphasized, “The introduction of sustainability-related disclosure requirements into regulatory frameworks through the adoption or other use of ISSB Standards, building on the strong foundations laid through the TCFD recommendations... is of vital importance for the healthy functioning of capital markets around the world.”
The FSB report also calls attention to the ongoing efforts to introduce assurance requirements, improving the reliability and transparency of climate-related disclosures. Despite progress, the IFRS Foundation's findings confirm that more work is needed to meet the full potential of these disclosure frameworks.
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