Why Canada should be the home of the new global sustainability standards board
As published by Mark Little and Charles-Antoine St-Jean in The Globe and Mail.
Building on this country’s already strong leadership in sustainability and governance, Canada is proposing to host the new International Sustainability Standards Board (ISSB), established by the International Financial Reporting Standards (IFRS) Foundation. Recently, public statements have put Switzerland, Germany and the United Kingdom on the radar as alternate would-be hosts.
This international interest reinforces the prestige and value associated with the new global body. It also provides an opportunity to demonstrate how Canada’s offer signals a dedicated commitment across our economy and society to sustainability, both domestically and internationally. To understand why Canada is the ideal location, it’s vital to first examine why the new global board will matter so much and how Canada already leads the world on financial governance, standard-setting and sustainability.
In a time marked by ever-increasing focus on environmental, social and governance (ESG) performance and disclosure, there is a greater need for standardization than ever before. Currently, there are multiple frameworks and sustainability standards, but no widely accepted global standards. The business landscape has evolved to the point where a consistent approach is both needed and wanted by issuers, investors and others. The ISSB will create a common playing field globally, offering comprehensive sustainability standards that provide comparability, transparency and consistency.
While each of the interested countries and cities have their own strengths, Canada’s offer is impressive as it features wide-ranging support and a substantive financial commitment. The Canadian offer comes with backing from a collaboration that spans the public, accounting, finance, pension, insurance, regulatory and Indigenous sectors, along with leading business, academic and public-policy organizations.
Suncor Energy and Chartered Professional Accountants of Canada are among the many organizations backing the Canadian proposal to host the global headquarters for the ISSB. Collectively, this group is known as the Canadian Champions for Global Sustainability Standards.
What makes Canada’s offer so compelling is that it goes beyond broad support and financial commitment. Locating its global headquarters in Canada would allow the ISSB to draw on our extensive history of standard-setting, collaborative leadership and innovation, and a deep and diverse talent pool.
Our country has a solid track record of working with global institutions on sustainability and standard-setting. In fact, Canada’s decision to adopt international financial reporting standards several years ago raised some eyebrows, as we did not align with our large neighbour to the south. The decision had a major impact globally, as it was influential in having other jurisdictions move to the international standards.
On the sustainability front, Canadian companies and organizations have helped shape some of the existing global ESG standards developed by the Global Reporting Initiative and the Sustainability Accounting Standards Board (now the Value Reporting Foundation), as well as international environmental management standards. In addition, sectors such as mining, forest products and chemicals manufacturing are among those active in the sustainability space with specific programs.
Importantly, Canada’s varied economy spanning resource extraction, manufacturing, finance, high-tech industries and more means that both the sustainability and standard-setting experts in this country can relate to the needs of the full range of international markets because, unlike in many countries, each of those needs is reflected in our own economy.
Canada has long been known both for the quality of its standard-setting and for its independent, objective and transparent structures responsible for the delivery of those standards. Because of Canada’s experience, knowledge and reputation, we are the ideal place for the new board and have the frameworks and infrastructure to help the IFRS Foundation deliver on its commitment to establish the ISSB quickly and effectively
Impressively, Canada already has one of the highest rates of sustainability reporting in the world, with almost every top Canadian company reporting on its ESG performance.
The IFRS Foundation trustees are expected to officially announce their decision on the ISSB headquarters during the United Nations Climate Change Conference, COP26, in November. Between now and then, the Canadian Champions for Global Sustainability Standards will continue to work enthusiastically to bring the new board to Canada and show our comprehensive commitment to strong sustainability governance.
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