Emmanuel Faber secures second term as ISSB Chair

Emmanuel Faber, the inaugural chair of the International Sustainability Standards Board (ISSB), has been re-elected for a second term, set to commence on January 1, 2025, and conclude on December 31, 2027.

This reappointment comes as the ISSB gears up for a pivotal year, with a focus on enhancing sustainability disclosures and fostering global alignment in reporting standards.

Under Faber’s leadership, the ISSB has made significant strides in establishing a global baseline for sustainability disclosures. The board has developed and issued two new sustainability reporting standards, IFRS S-1 and S-2, which deal with general requirements for sustainability disclosures and climate-related disclosures respectively.

These standards were formally endorsed by the International Organisation of Securities Commissions (IOSCO), marking a significant achievement for the ISSB.

Erkki Liikanen, chair of the IFRS Foundation Trustees, praised Faber’s leadership.

“Emmanuel and his strong leadership team have in the two years since we announced the creation of the ISSB delivered on all the commitments we set out at COP26 in Glasgow,” he said.

Pushing the boundaries

In his role as chair, Faber has not been afraid to challenge the status quo.

In an article he wrote for French newspaper Le Monde earlier this year, he questioned the sole focus by some market observers on double materiality. Faber wrote that European regulators had made an “ambitious regulatory choice” in requiring materiality assessments that extend beyond financial materiality.

Double materiality is a European concept that refers to capturing a company’s impact on the environment and society in addition to the impact of sustainability factors on the company.

The EU’s focus on double materiality is a key difference between the European Sustainability Reporting Standards developed by EU standards body European Financial Reporting Advisory Group (EFRAG) and those from the ISSB, which focus on “enterprise value” or single materiality.

Faber concluded by saying the ISSB’s general (IFRS1) and climate (IFRS2) standards will allow for the climate transition to be financed on the “necessary scale”. He added that it is time to stop trying to push for the “interdependence between the economy and environment” in the context of financial markets.

2024 Priorities: Regulatory adoption and technical activities

Looking ahead to 2024, the ISSB has outlined key priorities, including engaging with jurisdictions on regulatory adoption of its standards and supporting companies in implementing these standards. The board will also undertake other technical activities to further its mission.

In anticipation of the 2024 IOSCO Annual Conference in Athens, the IFRS Foundation has committed to work closely with both IOSCO and the Financial Stability Board. These organizations play essential roles in the adoption work, and the Foundation looks forward to jointly developing aligned workstreams with IOSCO.

“I am thrilled to continue leading the ISSB’s important work to meet investors’ demand for sustainability-related information,” Faber said.