The International Finance Corporation (IFC), part of the World Bank Group, and the IFRS Foundation announced a new collaboration at London's Climate Action Week.

The objective of this strategic alliance is to enhance sustainability and climate reporting in emerging markets and developing economies (EMDEs) to strengthen sustainable capital markets.

"Today marks a pivotal moment as we join forces with the IFRS Foundation in advancing sustainability and climate reporting," said Martine Valcin, IFC's Global Manager for Corporate Governance and ESG Advisory. "Our combined efforts are set to drive significant strides in standardising and enhancing transparency, ensuring that EMDEs are not left behind in the global shift towards sustainable finance."

The IFRS Foundation's International Sustainability Standards Board (ISSB) launched its first two standards in June 2023. These aim to create consistent and comparable sustainability-related financial disclosures for capital markets worldwide. Already, jurisdictions representing over half of global GDP are taking steps to adopt them.

The relationship between the IFC and the IFRS Foundation will concentrate on putting programmes into place that encourage and increase the ability of EMDEs to use these new standards successfully. To promote sustainable reporting, this involves creating toolkits, research articles, and training courses.

Also, the collaboration will offer specialised support and technical aid to assist countries in adopting and putting the standards into practice. This expands on the IFC's previously accomplished projects in Bangladesh and Jordan.

"We are proud to collaborate with IFC, uniting our commitment to high-quality sustainability and climate-related financial reporting with their deep market insights and global reach," said Jingdong Hua, ISSB Vice-Chair. "This partnership will expand our impact, helping enhance the quality of sustainability and climate-related financial reporting worldwide, especially in emerging markets and developing economies. It plays a critical role in bringing structured and reliable sustainability information to the forefront of global markets, facilitating investments."

This partnership expands on IFC's previous work, which includes programmes like the Sustainable Banking Network (SBFN) and the Beyond the Balance Sheet programme. To better align EMDEs with the new IFRS and European standards for sustainability and climate reporting, the Beyond the Balance Sheet programme has played a crucial role in offering consultancy services. Financial regulators and industry associations in EMDEs can share expertise globally on sustainable finance through the SBFN, which is coordinated by IFC.

Benefits of the Partnership

• Strengthens sustainable capital markets in emerging economies.
• Improves sustainability and climate reporting transparency.
• Ensures EMDEs participate in the global shift towards sustainable finance.
• Provides technical assistance and support for adopting new reporting standards.
• Increases the availability of reliable sustainability information for investors.

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Source: IFRS