IFC and IFRS team up to boost sustainability reporting in developing countries

July 3, 2024|Written by

The World Bank’s International Finance Corporation (IFC) and the International Financial Reporting Standards (IFRS) Foundation have announced a new strategic partnership aimed at boosting sustainability and climate reporting in developing countries.  

Announced last week during London’s Climate Action Week, the partnership will involve the development of toolkits and research programmes, as well as training missions, to encourage the consistent application of IFRS sustainability disclosure standards across developing nations. 

Countries will also receive “technical assistance and tailored support” in adopting and implementing the standards, building on similar initiatives that the IFC, the largest global development institution focused on the private sector in emerging markets, has already launched in Bangladesh and Jordan. 

The IFC’s global manager Martine Valcin described the deal as “a pivotal moment”. 

“Our combined efforts are set to drive significant strides in standardizing and enhancing transparency, ensuring that EMDEs (emerging markets and developing economies) are not left behind in the global shift towards sustainable finance.”

Supporting the uptake of sustainability reporting initiatives in emerging economies could contribute in various ways to a just transition to net zero, including by reducing the risk of local companies becoming less competitive as investors pay increasing attention to projects’ environmental impact.  

Intended to serve as the global baseline for corporate disclosures of environmental information, the IFRS Foundation’s International Sustainability Standards Board (ISSB) launched two sets of inaugural standards a year ago. 

The first, IFRS S1, establishes disclosure requirements for the management of general sustainability-related risks, while IFRS S2 covers specifically climate-related disclosures. 

The IFRS says that more than 20 jurisdictions making up around 55% of global GDP have decided to use the standards or are taking steps to introduce them into their regulatory frameworks. 

“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,” said ISSB vice-chair Jingdong Hua, who is also vice-president of the World Bank. 

“It plays a critical role in bringing structured and reliable sustainability information to the forefront of global markets, facilitating investments.”

The new partnership builds on existing initiatives to boost sustainability reporting in developing countries, including the IFC’s Beyond the Balance Sheet disclosure toolkits for companies, regulators, investors and stock exchanges. 

This page was last updated July 3, 2024

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