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Global market regulators said on Monday they may mandate the use of planned standards for corporate disclosures about climate change – if they are rigorously drafted.

Earlier this month finance ministers from the Group of Seven rich countries backed the creation of an International Sustainability Standards Board (ISSB) to write “baseline” rules for disclosures on how climate change will affect companies’ performance.

The ISSB is set to be launched ahead of the UN COP26 climate change conference in Glasgow in November to inject global consistency and comparability in disclosures.

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Investors complain about a patchwork of requirements across the world as jurisdictions such as the European Union push ahead with their own rules, and the first set of ISSB standards are due mid-2022.

IOSCO, which groups securities regulators from the United States, Europe and Asia, said in a report on Monday it was imperative the ISSB establish strong governance, proven independence and rigorous due process.

There are significant gaps and shortcomings in sustainability-related information currently given to investors, IOSCO said in its report.

The watchdog said it plans to consider potential endorsement of standards issued by the ISSB to use for cross-border, and potentially domestic, purposes to guide investors.

All IOSCO members commit to implementing standards and guidance they endorse and this would lend strong backing to the ISSB across the world’s main financial centres.

“Provided that IOSCO´s expectations are satisfied, we will consider setting a pathway for … encouraging relevant authorities to consider those standards in their approaches to mandatory sustainability-related disclosures,” said Erik Thedeen, chair of IOSCO’s sustainable finance task force and director general of Sweden’s Financial Supervisory Authority.

The ISSB is being set up by the London-based International Financial Reporting Standards Foundation, which already writes accounting rules used in over 140 countries.

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