Participants watch a video message from Britain’s Queen Elizabeth II at an evening reception to mark the opening day of the United Nations Climate Change Conference COP26 in Glasgow, Scotland on November 1, 2021 .ALBERTO PEZZALI / AFP / Getty Images

It has all the drama of a bid to be the host city of the Olympics. Okay, maybe not all the drama, but more than what is normally associated with the world of accounting.

One of the items on the agenda for climate talks in Glasgow, Scotland this week is the unveiling of a new global organization dedicated to ensuring that business demands for sustainability are brought forward. so as to allow easy and accurate analysis and comparison.

Our nation’s business and political leaders will be watching closely, as Ottawa has advocated for a Canadian city to be the seat of the new International Sustainability Standards Council.

It is not clear whether the home port of the new ISSB will be announced with its other details on Wednesday, which is the finance day at the COP26 summit in Glasgow. But if not, the event gives hopefuls an opportunity to make their case to the International Financial Reporting Standards Foundation in person. Finance Minister Chrystia Freeland is expected to attend the debates on Wednesday.

In the environmental, social and governance world, the ISSB plays an important role – disclosure is seen as the key to confirming reduced emissions and climate risk, and the organization will carry weight.

COP26 is underway, here are the challenges

Being selected would put Canada and its accountants in competition with the major global financial centers that are home to important bodies such as the Financial Accounting Standards Board in the United States, the Financial Stability Board in Switzerland and IFRS in Great Britain. The latter is responsible for forming the new sustainability council.

Germany, Switzerland and England are other countries considered to be the seat of the council.

His training, first announced a year ago, responds to complaints from investors and businesses around the world that sustainability issues, such as climate risks and a diverse workforce, are reported using a range of multiple frames, which creates confusion and uncertainty. This contrasts with financial reporting, where standardization of accounting principles has long been, well, the norm.

Sustainability reporting has quickly grown in importance as more investors assess the risks and rewards of ESG and use the data to help direct capital to targets that appear ready to go. face future economic and environmental changes.

The first set of sustainability standards are scheduled for next year, with climate considerations to be an initial priority. The world is gradually coming together around the framework developed by the Working Group on Climate-Related Financial Disclosures. Canada’s securities commissions have started the process to make TCFD reporting mandatory for public companies.

Ms. Freeland introduced Canada to host the ISSB in July. She didn’t name a specific city, but Calgary, Mississauga, Toronto, Montreal, Ottawa and Vancouver have all been listed as supporters of the effort. As part of the bid, she said a coalition of Canadian public and private institutions will provide a “significant welcome fund” to support ISSB operations during an initial period.

One of the early funders of the effort, CPA Canada, the country’s accounting organization, offered temporary office space in addition to logistics and operations support.

In her letter to the Chair of IFRS, Freeland praised Canada’s commitment to tackling climate change, through measures such as carbon pricing and investments in clean technology. She said Canada has highly respected accounting, auditing and assurance professions, with deep expertise in law, capital markets and sustainable finance.

She also said the country is used to hosting international organizations, citing the International Civil Aviation Organization, the Secretariat of the Convention on Biological Diversity and the World Anti-Doping Agency as examples.

The offering is backed by dozens of financial backers, including banks, insurance companies, pension funds, and large corporations such as Bell Canada and Suncor Energy Inc.

Ottawa has worked to counter an international perception that Canada is very good at setting environmental goals and poor at achieving them. This year, Prime Minister Justin Trudeau toughened the country’s emissions reduction target, setting a new target of at least 40% reduction from 2005 levels by 2030.

Winning the tender for the ISSB headquarters would give his government a little more authority when it comes to showing that Canada belongs to the big leagues of sustainable finance and that it can play. a greater role in setting the rules.

Tens of thousands of people, from world leaders to climate protesters, are in Glasgow for COP26. Adam Radwanski, The Globe’s climate change columnist, says the size and attention around the summit makes it harder to leave without meaningful agreements on climate action.

The Globe and Mail

Jeffrey Jones writes on sustainable finance and the ESG sector for The Globe and Mail. Email him at [email protected].

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