ISSB chair Emmanuel Faber. Photo from Wikimedia Commons
Companies need to shift the responsibility of addressing sustainability to top management if the business world is to navigate climate risks, says Emmanuel Faber, the chairman of the International Sustainability Standards Board (ISSB).
Faber, former chief executive of French food giant Danone, was speaking at the annual conference of the International Financial Reporting Standards (IFRS) Foundation, as an unprecedented heatwave swept across Europe.
Faber said companies are already feeling the pain and noted that models predict the number of heatwaves is likely to increase by three to five times in the coming 20 to 30 years. This should be taken into account when companies make investment decisions concerning infrastructure, factories and buildings, he added.
“The decisions that we’re making today on capex and others are going to be impacted in their return in their effects by those three to five times more heat waves and they are projected to be not only more frequent but also longer and more intense, so this is just starting,” he said.
Responsibility for collecting information about climate topics usually sits under the chief sustainability officer (CSO), but those people are not usually included in discussion with portfolio managers about allocating capital, he said.
“That shift from the CSO to the CFO, to the chief investment officer, to the chief risk officer is critical to happen because that is the way it will connect with the valuations and it’s a significant organisational change, management change, cultural change in organisations,” Faber said.
“Investors and bankers are flying blind on really understanding the sustainability of balance sheets and P&L,” he said.
Faber cited a new study by KPMG which finds that 72% of executives have a detailed understanding of sustainability strategy, metrics and performance, but only 19% use robust quantification approaches to measure how sustainability impacts financial outcomes, operational gains, and innovation.
Faber noted that 44 jurisdictions have committed to adopt the ISSB’s standards that allow investors to better compare the sustainability of companies worldwide, with 18 of them set to report on 2026 performance.
Meanwhile, ISSB vice-chair Sue Lloyd defended the ISSB’s decision to propose non-mandatory guidance on how companies should disclose risks relating to biodiversity and ecosystems rather than binding standards.
Leaders from business and finance as well as scientists, experts and civil society organisations have called upon the ISSB to introduce a new standard on nature.
Lloyd said the IFRS S1 standard already requires companies to provide information about nature risks, but the ISSB does not want to make nature disclosure mandatory at the moment because it might disrupt implementation of the S1 and S2 sustainability standards.
“This is our way of walking the very fine trade off between the aspiration of improving the quality and the comparability of reporting on such an important topic as nature, but not disrupting all of the efforts around the world,” she said.
It plans to publish a draft for public comment in October.
Lloyd said the ISSB is working with the European Commission to try to harmonise its standards with the EU’s updated reporting framework, the European Sustainability Reporting Standards (ESRS).
“What we are trying to do here is to reduce the risk that companies need to navigate two totally different sets of standards,” she said. “We’re working hard from our side to make sure that we have efficiency for those using pure ESRS.”
This page was last updated July 1, 2026
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Emma Thomasson is a British journalist, consultant and trainer based in Berlin. She is an expert in economics, politics, business and technology. She previously worked for Reuters as a correspondent and bureau chief in Germany, Switzerland, the Netherlands, South Africa and the UK.
