Manama: Mahmood Rafique, Editor: A global set of internationally recognised sustainability reporting standards is needed to bring transparency, accountability, efficiency and consistency in the information shared about sustainability by the financial institutions, says, CIBAFI.
Abdelilah Belatik, Secretary General CIBAFI thanked the IFRS Foundation Trustees for giving the opportunity to the Islamic Financial Services Industry to comment on the Consultation Paper.
CIBAFI in a statement said that in order to bring transparency, accountability, efficiency and consistency in the information shared about sustainability by the financial institutions a global set of internationally recognised sustainability reporting standards is needed and the IFRS Foundation appears best equipped to do this in an authoritative and appropriately governed way. Subject to sufficiently wide acceptance of its role, the development of a sustainability standards board (SSB) to operate under the governance structure of the IFRS Foundation would be an appropriate approach to achieving further consistency and global comparability in sustainability reporting.
Second, it is recommended for the governance structure of the SSB to include people from organisations that issued reporting standards and work to identify the common elements among the most important existing standards and address their limitations in order to develop harmonised and global standards. In addition, it would be appropriate for the governance and operational structures to include people with some experience of Islamic finance to ensure that the particularities of Islamic finance are taken into consideration while developing the standards for wider implementation.
Third, it is recommended that SSB could first start preparing and issuing a framework that will guide and support its work in general. Once the guiding framework is established and adopted, SSB could start developing climate-related financial disclosures taking into consideration the convergence that exists particularly with that of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). However, SSB should, in parallel, begin the longer-term process of broadening its scope into other areas of sustainability reporting. SSB should adopt a gradualist approach taking into account a reporting that focuses not only on the effects of climate change on the organisation but also the impact of the organisation on the outside world.
