Internal Audit Profession Supports Creation of International Sustainability Standards Board (ISSB) Under IFRS Foundation
November 4, 2021
Applauds Addition of Value Reporting Foundation and Climate Disclosure Standards Board to ISSB to Move Global Markets to a Unified Disclosure Standard for Climate Change Reporting and Broader ESG Disclosures
Welcomes Global Commitment of $130 Trillion by GFANZ to Support Net Zero Initiatives Announced at COP26
LAKE MARY, Fla. (November 4, 2021) — The Institute of Internal Auditors (IIA) announced today that it supports the creation of the new International Sustainability Standards Board (ISSB) under the IFRS Foundation as an independent standard setter to sit alongside the independent IASB. Further, the IIA supports the consolidation of the Value Reporting Foundation (VRF) and the Climate Disclosure Standards Board (CDSB) into the ISSB in order to promulgate uniform, global standards for disclosures around climate change and ESG factors.
“Today’s ISSB announcement represents a significant leap towards much-needed global standards for disclosures around climate change and sustainable business,” said Anthony Pugliese, CIA, CPA, CGMA, CITP, President and CEO of the IIA. “Investors and other stakeholders require comparable, connected and reliable decision-useful information about a company’s performance related to ESG matters. In order to achieve that, organizations’ internal audit function plays a central role in providing assurance that the organization employs rigorous internal controls around its climate change and ESG data, and that it communicates reliable sustainability disclosures to internal and external users of that information.”
Pugliese is the IIA’s voting member of the International Integrated Reporting Council (IIRC), which recently merged with SASB to form the VRF. During today’s finance day at COP26, Erkki Liikanen, Chair of the IFRS Foundation Trustees, announced the merger of VRF and CDSB into the ISSB as a means to help organizations provide good quality, comparable information about the impact of sustainability-related risks and opportunities for making investment decisions. Added Pugliese, “With financial reporting, issues around data quality were largely solved decades ago. With climate and sustainability reporting, we’ve made progress in the last decade, but we have more work to do, as today’s announcements indicate. Internal auditors serve a key role to help ensure this information is high quality, building trust in disclosure and ultimately protecting the public interest.”
The ISSB news follows on the heels of another groundbreaking announcement by the Glasgow Financial Alliance for Net Zero (GFANZ) to commit $130 trillion – 40% of the world’s global assets – to help the world meet the goals set out in the original Paris agreement. An alliance of 450 of the world’s leading financial institutions and championed by Mark Carney, UN Special Envoy on Climate Action and Finance, and former chair of the Financial Stability Board, GFANZ will provide the much-needed resources to move the world towards a net zero status with respect to emissions.
“The GFANZ financial commitment reminds us that the internal audit profession provides a critical function within climate finance,” added Pugliese, “due to an internal auditor’s inherent understanding of risks and effective internal controls to monitor, manage and mitigate those risks.”
About The Institute of Internal Auditors
The Institute of Internal Auditors (IIA) is the internal audit profession's most widely recognized advocate, educator, and provider of standards, guidance, and certifications. Established in 1941, The IIA today serves more than 200,000 members in nearly 200 countries and territories.
Chris Almonte for The IIA