International Sustainability Standards Board

But we're now reaching a point where those what would ordinarily be described as scope three carbon emissions are now on the table.

And the release of what ultimately came out of the US with the International Sustainability Standards Board, but has now been adopted in the UK under the banner of the UK Sustainability Reporting Standards, is starting to force companies, not just financial services, but any company to recognize and account for scope three.

And embodied carbon is material enough to be part of that if you're in the business of buildings.

So when it comes to finance providers now, well, yeah, they are having to recognize the carbon implications of what they're financing.

So things like physical climate risk, stress testing, things like that, and also on market standards.

So Hirotaka Hideshima at Daiichi Life, for example, was calling on the International Sustainability Standards Board to add a reverse stress test to its nature reporting guidance.

So essentially just before the conference started, the ISSB put out a consultation paper on its nature standards.

So it's not a full standard, but they're calling it a practice statement.

Around the lack of standardized data with as much...

Work has gone into things like climate reporting regulation, ISSB standards.

We aren't really at a point yet where we have anything that resembles a gap for sustainability-focused data.

So I think that that lack of standardization is probably going to feature pretty high on the list for a number of years to come.

Hello, this is Sue Lloyd, Vice Chair of the ISSB, and I'm here today with our Chair, Emmanuel Faber.

We're recording this podcast following our October board meeting here in Frankfurt.

So as usual, we're going to cover the board discussion we've had this week, which was focused on enhancements to our industry-specific guidance, the SASB standards.

So maybe, Emmanuel, you could start with that.

With pleasure, Sue.

Welcome everyone to ISSB's Dog and Pony Show.

As usual, this month's update on the big events.

Well, Sue, first and foremost, congratulations to you and the whole board and the team.

So I think the challenge or the concern there being voiced is one that we're going to see that sort of reduced reporting being a barrier going forward.

I mean, I would say things like ISSB have seen much stronger adoption.

And my view is that over the long term, we are going to continue to see an improvement in the quality and materiality of corporate reporting around ESG factors.

And is there anything specific that FTSE Russell is doing in this regard? We obviously collect a lot of sustainability data and analysis.

So what we're seeing in the EU is a general reduction of reporting burden that companies felt through these regulations.

And what we're seeing outside of EU globally across like 40 different jurisdictions is increase in adoption of another set of sustainability standards called the ISSB.

So more and more countries are adopting these new standards as part of their own national regulations.

So on one hand, things are narrowing down and reducing in scope.

And it's really about what kind of ESG data and disclosures are relevant to stakeholders.

And all of these changes are kind of happening towards those spheres.

So how important are standardised global regulations? As you said, more and more countries are taking up the ISSB

standards.

PSP Investments and Nuveen have formed a $790 million joint venture in grocery-anchored U.S. shopping centers.

And the International Sustainability Standards Board has opened a consultation on how companies should report on nature.

Comments close on the 19th of February.

Next week is crowded.

A- and I was wondering if, uh, you could also contrast a bit about what you're doing with traditional sustainability data.

Your examples are really very clear in this, but there's so much of CSRD, ESRS, ISSB, you know, all these reporting and disclosure frameworks.

People might just think, oh, this is just another reporting framework.

However, this idea of actually connecting environmental, societal impacts to value, I think is something that's fundamentally different.

We only have one planet.

You said we manage what we measure and now we live in times where in the European Union since financial year 2024 we have mandatory sustainability reporting for big firms and outside of Europe with the ISSB more and more countries are starting making sustainability measurement and reporting mandatory.

Is this a new phenomenon that helps us to make sustainability more strategic? Or how do you assess the value of mandatory sustainability reporting today, two, three years after it started?

For me, it's absolutely key.