Sustainability standard-setter organization ISSB said Wednesday that it will help investors understand how a company incorporates sustainability to create value.
Meeting in Montreal during the ongoing U.N. Convention on Biological Diversity, or COP15, the International Sustainability Standards Board said in a news release that it is also making progress on several biodiversity issues, including natural ecosystems and "just transition," a framework that aims to address the socioeconomic impact of the shift to a low-carbon economy.
ISSB officials are working on sustainability disclosure standards due out "as early as possible" in 2023, according to a spokeswoman.
It now plans to articulate the relationship between sustainability matters and financial value creation by adding clarification to a general requirements standard, the spokeswoman said in an email.
That general sustainability-related disclosures standard, S1, will describe sustainability as the ability for a company to sustainably maintain resources and relationships with and manage its dependencies and impacts within its whole business ecosystem over the short, medium and long term," the release said.
"By referring to this articulation of the value creation process, a company will be better placed to explain to its investors how it is working sustainably within its business ecosystem —addressing the impacts, risks and opportunities that can affect its performance and prospects — to ultimately deliver financial value for investors," ISSB said in the release.
ISSB Chairman Emmanuel Faber told COP15 delegates on Tuesday that clarifying the connection between sustainability and financial value creation, while focusing on investors, will also make clear to companies "that financial value creation is affected by the proper preservation, development and regeneration of all the resources and relationships, including natural and human."