ABA comments on international sustainability proposal

The American Bankers Association this week offered feedback to the newly formed International Sustainability Standards Board to create global baseline standards in disclosures related to sustainability and climate-related risks. In the letter, ABA echoed similar technical comments made in a previous comment letter on climate disclosures proposed by the Securities and Exchange Commission, including the need for scalability of any global baseline standards, problems with using Scope 3 emissions as indicators of transition risk and the need for safe harbors.

ABA also emphasized that the concept of “materiality”—a foundational aspect of disclosure to investors—must be clear and well-understood by all stakeholders. “Without such clarity, the [proposed disclosure framework]could create a materiality standard for reporting on climate and sustainability that differs from the materiality standard for other financial reporting and disclosure.”

The ISSB was formed by the International Financial Reporting Standards Foundation, which also oversees the International Accounting Standards Board, and ABA expects ISSB standards to be influential worldwide among those in both the investment and regulatory communities, no matter the final SEC rules.