IFC and IFRS Foundation announce partnership to improve sustainability reporting in emerging markets

The International Finance Corporation (IFC), a member of the World Bank Group, and the IFRS Foundation have signed a Memorandum of Understanding agreeing their strategic partnership to strengthen sustainable capital markets by improving sustainability and climate reporting in emerging markets and developing economies (EMDEs).

The collaboration was announced during London's Climate Action Week.

Martine Valcin, IFC Global Manager, Corporate Governance and ESG Advisory, Knowledge and Learning, said:

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 standardising and enhancing transparency, ensuring that EMDEs are not left behind in the global shift towards sustainable finance.

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% of global gross domestic product (GDP) are already taking steps towards using these Standards.

The partnership will focus on implementing programmes 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 programmes 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.

Jingdong Hua, ISSB Vice-Chair, said:

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. It plays a critical role in bringing structured and reliable sustainability information to the forefront of global markets, facilitating investments.

This collaboration builds on IFC's extensive efforts through initiatives such as the Beyond the Balance Sheet programme and the SBFN. The Beyond the Balance Sheet programme 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 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.

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.