Huw Jones

LONDON (Reuters – Even if they take longer to become mandatory, companies in the United States will voluntarily disclose new information about global climate. The chair of a new standard setting body said Thursday.

At the COP26 climate summit, November saw the creation of an International Sustainability Standards Board. This board aims to improve transparency from companies as well as stop any “greenwashing”, or exaggerated climate credentials.

Emmanuel Faber, chair of the ISSB said that this month’s public consultation would see the first set standards for Frankfurt-based boards go out to review.

The International Accounting Standards Board (ISSB) was the sister organization to the ISSB. It took 20 years for 140 countries to agree to its standards.

Faber stated that “we don’t need 25 years to reach our goal, but we do have a few more years”, and added that there is an alternative route for markets.

The U.S. will likely see a large number of market participants adopting directly. The former chairman of French yogurt maker Danone stated that they may decide to adopt, even if their country is not a formal adopter.

Draft disclosures will be focused on greenhouse gas emission from the company, as well as emissions from its energy use and from products and supply chains.

Investors are requesting a worldwide baseline to allow countries and regions to continue to grow on the existing standards.

The European Union introduced a more ambitious concept of “double materiality”, which measures companies’ impact on the environment, and not only how it will impact a company’s bottom line.

Faber declared that the “politically-driven noise” about double materiality must be silenced, as it is not against the global baseline approach ISSB has taken – simply building on its common start point.

Also, the U.S. Securities and Exchange Commission is expected to present on March 21 how businesses can disclose the effects of climate change upon their operations.

Faber stated that the SEC baseline in the United States will match the global baseline and local businesses will then be able to adopt global standards.

Public consultation for the ISSB will be at least 3 months long, and final adoption is expected by year’s end.