New global rules backed by the G20 aim to…

Written by Hugh Jones and Simon Jessop

LONDON (Reuters) – Businesses will face mounting pressure to disclose how their businesses affect climate change under a new set of global rules backed by the G20 that are designed to help regulators crack down on so-called “greenwashing”, which involves creating false sustainability. appearance.

The standards, published Monday, have been written by the International Sustainability Standards Board (ISSB), directing trillions of dollars toward investments that enhance its environmental, social and governance (ESG) credentials.

It is up to each country to decide whether to require listed companies to apply the standards, said Emmanuel Fabre, head of the ISSB, adding that the standards could be used in annual reports from 2024 onwards.

Faber told Reuters that Brazil, Canada, the United Kingdom, Japan, Singapore, Nigeria, Chile, Malaysia, Egypt, Kenya and South Africa were considering using it.

The ISSB standards are based on the G20 Voluntary Standards for Climate-Related Financial Disclosures (TCFD).

The ISSB is part of the IFRS, an independent institution that also writes accounting rules used in more than 100 countries, while Iosco, a global securities supervisory body, is expected to “endorse” the new standards.

“It just brings more accuracy, it’s more in line with financial reporting,” said David Harris, head of sustainable strategic finance initiatives at the London Stock Exchange Group, which controls the London Stock Exchange.

Harris said that 42% of the world’s 4,000 largest companies do not currently provide data on Scope 1 and 2 carbon emissions.

“It means that capital markets are much less efficient because you don’t have the full picture,” Harris said. Under the new rules, companies will need to disclose material emissions, with verification by external auditors.

The European Union will finalize its disclosure rules next month, and both the EU and ISSB have sought to make their standards “interoperable” to avoid duplication for global companies.