ISSB defines how it will use ‘sustainability’
At its most recent meeting, the International Sustainability Standards Board finally settled on a definition of “sustainability” that will guide its work going forward.
The board felt it important to explicitly link the concept of sustainability with value creation, as a company’s ability to deliver value for its investors is inextricably linked to the stakeholders it works with and serves, the society it operates in, and the natural resources it draws on. With this in mind, they defined “sustainability” thusly:
“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. Sustainability is a condition for a company to access over time the resources and relationships needed (such as financial, human, and natural), ensuring their proper preservation, development and regeneration, to achieve its goals.”
“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,” said the ISSB statement.
Beyond climate
The ISSB also announced that it is open to exploring other standards beyond the current climate change focus outlined at the board’s conception. Examples offered include cultivated and natural biodiversity, deforestation, and water. Specifically, the board said it will research incremental enhancements that complement its climate-related disclosure standards that relate to natural ecosystems and the human capital aspects of the climate resilience transition.
To aid in this, the ISSB said it will draw from the work already done by the Taskforce for Nature-related Financial Disclosure, as well as other existing standards that cover the same areas, as they relate to the information needs of the investors (as investors and other capital market participants are the primary audience for these standards).
To this end, the board also announced the appointment of two further special advisors, Karin Kemper and Geordie Hungerford, to provide strategic counsel on issues relating to natural ecosystems and just transition. Karin Kemper was until recently global director for environment, natural resources and blue economy at the World Bank; she will provide strategic counsel on a range of natural ecosystem topics. Geordie Hungerford is CEO of the First Nations Financial Management Board in Canada and is a Gwich’in (whose traditional territories are in the Northwest Territories and Yukon of Canada and in Alaska). Hungerford will provide strategic counsel on issues important to indigenous peoples, which include biodiversity.
