The International Finance Corporation (IFC), a member of the World Bank Group, and the IFRS Foundation have signed a memorandum of understanding agreeing on their strategic partnership to strengthen sustainable capital markets by improving sustainability and climate reporting in emerging markets and developing economies (EMDEs).
IFC said in a statement on Thursday that this partnership is a commitment to future-proof financial markets against environmental risks, support the private sector’s ability to seize opportunities to evolve towards more resilient business models, and to promote the transparency that global investors and stakeholders increasingly demand.
The partnership will focus on implementing programs to promote and build capacity for the consistent application of the IFRS Sustainability Disclosure Standards across EMDEs.
This includes developing toolkits and research publications as well as conducting training programs to encourage sustainability reporting.
Further, the partnership outlines plans to provide technical assistance and tailored support to help jurisdictions adopt and implement these Standards effectively, building on IFC’s successful initiatives already in Bangladesh and Jordan.
“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,” said Martine Valcin, IFC Global Manager, Corporate Governance and ESG Advisory, Knowledge and Learning.
It is noted that the IFRS Foundation’s International Sustainability Standards Board (ISSB) issued two inaugural Standards in June 2023 with the objective of delivering global consistency and comparability of sustainability-related financial disclosures for capital markets.
Jurisdictions making up around 55 percent of global gross domestic product are already taking steps towards using these Standards.
“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,
“It plays a critical role in bringing structured and reliable sustainability information to the forefront of global markets, facilitating investments,” said Jingdong Hua, Vice-Chair of the ISSB.
According to the statement, this collaboration builds on IFC’s extensive efforts through initiatives such as the Beyond the Balance Sheet program and the Sustainable Banking and Finance Network (SBFN).
The Beyond the Balance Sheet program has been pivotal in providing advisory services to improve sustainability and climate-related reporting in EMDEs, aligning with the new IFRS Sustainability Disclosure Standards and the European Sustainability Reporting Standards.
The Sustainable Banking and Finance Network (SBFN), facilitated by IFC as its secretariat, is a global knowledge-sharing and capacity-building platform on sustainable finance for financial sector regulators and industry associations in EMDEs.
The IFRS Foundation is a not-for-profit organization created in 2001 to develop in the public interest—high-quality, understandable, enforceable and globally accepted standards for general purpose financial reporting, and to promote and facilitate their adoption.
The Standards—IFRS Accounting Standards and IFRS Sustainability Disclosure Standards—are collectively referred to as IFRS Standards.
They are set by the Foundation’s two independent standard-setting bodies, the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB), using a rigorous, inclusive and transparent due process.
IFC is the largest global development institution focused on the private sector in emerging markets.
The organization works in more than 100 countries, using its capital, expertise, and influence to create markets and opportunities in developing countries.
In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.
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