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IFRS Foundation and IFC Announce Partnership to Improve Sustainability Reporting in Emerging Markets
The International Finance Corporation (IFC), part of the World Bank Group, and the IFRS Foundation have signed a Memorandum of Understanding to establish a strategic partnership to enhance sustainability and climate reporting in emerging markets and developing economies (EMDEs).
This collaboration, announced during London’s Climate Action Week, represents a significant step forward in the effort to standardize and improve transparency in sustainable finance.
Key Highlights
The International Finance Corporation (IFC) and the IFRS Foundation have partnered to enhance sustainability reporting in emerging markets and developing economies (EMDEs).
Announced during London’s Climate Action Week, this initiative aims to standardize and improve transparency in sustainable finance.
Implementation of IFRS Sustainability Disclosure Standards will be a key focus.
Development of toolkits, research publications, and training programs to promote sustainability reporting.
Provision of technical assistance and tailored support to help jurisdictions adopt and implement these standards effectively.
The collaboration builds on IFC’s successful programs like Beyond the Balance Sheet and the Sustainable Banking and Finance Network (SBFN).
Emphasizes a commitment to future-proof financial markets and support resilient business models.
Driving Sustainable Finance in Emerging Markets
The new partnership between IFC and the IFRS Foundation is poised to address critical gaps in sustainability reporting across EMDEs.
Martine Valcin, IFC Global Manager, Corporate Governance and ESG Advisory, Knowledge and Learning, emphasized the importance of this initiative, stating,
“Today marks a pivotal moment as we join forces with the IFRS Foundation in advancing sustainability and climate reporting. Our combined efforts are set to drive significant strides in standardizing and enhancing transparency, ensuring that EMDEs are not left behind in the global shift towards sustainable finance.”
ISSB Standards and Their Global Impact
The IFRS Foundation’s International Sustainability Standards Board (ISSB) issued its inaugural standards in June 2023 to deliver global consistency and comparability of sustainability-related financial disclosures.
With jurisdictions representing about 55% of global GDP already moving towards these standards, the partnership focuses on their implementation in EMDEs. Key components include developing toolkits, research publications, and training programs to foster sustainability reporting.
Building Capacity and Technical Support
The partnership will implement programs to build capacity for the consistent application of the IFRS Sustainability Disclosure Standards across EMDEs. This includes providing technical assistance and tailored support to help jurisdictions adopt and implement these standards effectively. IFC's existing successful initiatives in countries like Bangladesh and Jordan will serve as a foundation for these efforts.
Jingdong Hua, ISSB Vice-Chair, highlighted the collaborative effort:
“We are proud to collaborate with IFC, uniting our commitment to high-quality sustainability and climate-related financial reporting with their deep market insights and global reach. This partnership will expand our impact, helping enhance the quality of sustainability and climate-related financial reporting worldwide, especially in emerging markets and developing economies.”
Beyond the Balance Sheet and the SBFN
This partnership builds on IFC’s extensive efforts through programs such as Beyond the Balance Sheet and the Sustainable Banking and Finance Network (SBFN). Beyond the Balance Sheet has been instrumental in providing advisory services to improve sustainability and climate-related reporting in EMDEs, aligning with the new IFRS and European Sustainability Reporting Standards.
The SBFN, facilitated by IFC as its secretariat, is a global platform for knowledge-sharing and capacity-building on sustainable finance for financial sector regulators and industry associations in EMDEs.
IFRS and IFC Commit to Sustainable Financial Markets
This collaboration underscores a commitment to future-proof financial markets against environmental risks and supports the private sector in evolving toward more resilient business models. It aims to promote the transparency that global investors and stakeholders increasingly demand.
The joint effort of IFC and IFRS Foundation is crucial in bringing structured and reliable sustainability information to the forefront of global markets, facilitating investments, and ensuring EMDEs are not left behind in the global transition towards sustainable finance.
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