DAVOS, Switzerland, (Xinhua): China has played an important role in supporting the establishment of internationally comparable sustainability disclosure standards, the head of the relevant standard-setting body has said.
Emmanuel Faber, chair of the International Sustainability Standards Board (ISSB), applauded China’s recent release of a trial standard for climate-related sustainability disclosure for corporates.
“Given the size of China’s economy, I think this will inject new momentum into the promotion of the international sustainability standards,” he told Xinhua on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland.
Faber noted that institutions, such as the United Nations, the G20, the International Monetary Fund, and the Organization for Economic Co-operation and Development, have all underscored the pressing need to establish a unified, comparable and reliable disclosure standards system to help investors assess sustainability-related risks and opportunities in companies’ business models.
Faber said countries and regions that are implementing ISSB Standards account for nearly 60 percent of global GDP.
Capital market regulators and policymakers believe that the ISSB Standards help enhance their countries’ economic competitiveness, mainly because they enable foreign investors to better understand the opportunities and risks embedded in the business models of relevant companies, he said.
Therefore, those companies that want to be prepared for the future and actively transition to more resilient business models will, from a cost-of-capital perspective, benefit from having sufficient funding to support innovation investment, drive future development, and effectively respond to potential risks, he added.
Faber said the ISSB Standards not only attract foreign investment but also promote trade development. By establishing a transparent disclosure system and accountability mechanisms, the standards enhance transparency in value chains, thereby facilitating trade exchanges.
The creation of the ISSB was announced at the 2021 UN Climate Change Conference in Glasgow, following strong market demand for establishing standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures.
