16 March 2021

IOSCO's Servais sees coherence between IFRS Foundation and EU approach on non-financial reporting

IOSCO’s coordination role at international level; the initiatives taken by the IFRS Foundation and the relevance of audit and assurance when it comes to sustainability-related disclosure.

Many thanks for inviting me to this digital version of the yearly EU-Asia Afore & Asifma event.

I very much welcome the interesting debate in today’s panels. The dialogue between European and Asian stakeholders and authorities has been very fruitful and has allowed for better understanding of our respective challenges and possible solutions.

In my closing remarks, I will focus on the important recent developments in sustainable finance seen through an international lens.

But first, let me underline the relevance of the themes discussed today in the light of the recovery from the COVID-19 pandemic.

The COVID-19 crisis demonstrates once again the opportunity cost of not having robust market-based finance. We saw this after the 2008 crisis: the US recovered fast, partly because of its highly developed capital markets. Large and open capital markets can mobilise the investment needed to facilitate the post-COVID recovery. Market-based finance will also be essential to financing the digital and sustainable transitions.

Turning to the international agenda on sustainable finance, I will touch on three interrelated matters:

- IOSCO’s coordination role at international level,
- the initiatives taken by the IFRS Foundation and
- the relevance of audit and assurance when it comes to sustainability-related disclosure.

In so doing, I will draw on my experience as vice chair of IOSCO, which has worked extensively on these matters under Ashley Alder’s leadership and assisted by a task force in which Erik Thedéen, the UK FCA, the Spanish CNMV and the IOSCO Secretariat play an important role.

I am also directly involved in these discussions, taking part in the international governance of accounting standard-setting as chair of the IFRS Monitoring Board, which oversees the IFRS Foundation.

As co-chair of the Monitoring Group, which oversees audit-related standard-setting to ensure it is done in the public interest, I also participate in the oversight of the auditing standard-setters.
IOSCO’s role
IOSCO works in three key areas:
- sustainability disclosures at corporate level,
- the role of ESG data and ratings providers, where IOSCO is looking to the risks associated with the increasingly important role of ratings;
- asset managers’ disclosures and investor protection issues such as greenwashing. Limiting greenwashing is an important challenge and of interest to all stakeholders. Any major case of greenwashing could jeopardize the credibility of sustainable finance efforts.

In my further remarks, I will focus on corporate level disclosures, as there is a growing momentum building, as attested to by various press statements and reports in recent weeks issued by IOSCO, the IFRS Foundation, the FSB and the European body EFRAG....

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