Finance Minister Chrystia Freeland has made a bid to have the International Sustainability Standards Board (ISSB) headquartered in Canada. The ISSB is a new global body established by the International Financial Reporting Standards (IFRS) Foundation to govern sustainability-related reporting. The body is set to be unveiled ahead of the COP26 UN Climate Change summit being held in November 2021, in Scotland. The announcement of where it will be headquartered will also be made during the conference.
The IFRS already manages the International Accounting Standards Board (IASB) based in London that issues accounting rules that are used in over countries worldwide. Though the ISSB was proposed by IFRS trustees, it will be run by a parallel board.
It is expected to oversee a change from voluntary reporting to establishing global standards in how companies will report on the impact climate change has on their businesses. There has been a growing number of companies claiming green credentials and increased legislation looking to address climate change challenges. The ISSB is intended to provide consistency and comparability for this financial reporting.
To support her bid, Freeland has informed the IFRS Foundation that there would be a significant “welcome fund” availed through public and private funding to support the ISSB’s operations if it was decided to set up in Canada. The consortium of financial firms, government, academic, and environmental stakeholder organizations, dubbed the Canadian Champions for Global Sustainability Standards, would facilitate this establishment through funding the start-up costs for the headquarters.
She added that Canada’s national accounting body, the Chartered Professional Accountants of Canada (CPA Canada), has offered to provide interim office space and other support. Freeland assured the IFRS Foundation that there would be no controlling interest on the part of contributors and that sources would be fully disclosed in keeping with the Foundation’s transparency and accountability standards.
BMO Financial Group has backed the bid, stating in a press release that the country’s government and corporate sector had a solid reputation for strong business governance and sustainable business practices. CPA Canada President and CEO, Charles-Antoine St-Jean, added that the country’s major cities were just one flight away from most major financial markets and that it offered a diverse and multilingual workforce that would make Canada the ideal location for the ISSB headquarters.
The bid is however now facing competition from further proposals by the UK financial sector to have the body headquartered in London. ICEAW CEO, Michael Izza, has argued that that London is the world’s pre-eminent global financial centre with high governance standards, making for a compelling case to have the body based there. The City of London Corporation has also backed the ICEAW letter to the Foundation.
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