Sustainable finance | Montréal at the heart of international standards

The environmental financial disclosure standards that must guide the major international funds will come from Montreal, among others, and the first rules are expected this year, according to the director of the Quebec branch of this new global regulator.

Julien Arsenault
The Press

Although the International Sustainability Reporting Standards Board (ISSB) has not yet decided where it will settle, that does not prevent Charles-Antoine St-Jean, regional director of the organization, from being quite busy at times.

“We are starting to hire,” he explained in an interview with The Press, on the sidelines of the official launch of activities. “The consultation files are in progress. Towards the end of the year, beginning of next year, we should have the first standards. »

After several months of steps, Ottawa and Quebec have confirmed support of 12 million to the ISSB to support its activities. The announcement was made in the presence of the Federal Minister of Finance, Chrystia Freeland, the Quebec Minister of International Relations, Nadine Girault, and representatives of the regulator.

Overall, the Council’s Montreal office project is estimated at $50 million. The ISSB’s head office is in Frankfurt, Germany, but it is promised that the Quebec branch will play an important role.

Expected arrival

The mission of the ISSB, whose creation was announced last fall as part of COP26, is to set up financial disclosure standards that, ideally, would be used in all companies.

These standards are eagerly awaited in the business community and the investment capital markets in order to enhance the assessment and accounting of business risks related in particular to climate change and socio-environmental concerns.

“Over the next two or three years, many long-term investors will be demanding to use an international standard,” said Mr. St-Jean, former president and CEO of CPA Canada. “The ISSB will bring everything together when it comes to standards. The BlackRocks of this world are going to want corporate disclosure that meets that standard. »

The work of the ISSB has already begun. At the end of March, the organization unveiled two proposed disclosure rules. The first concerns sustainable development standards. The other looks at climate risks.

Unavoidable turn

For now, no company is forced to follow such standards. This is set to change, believes M^me Freeland. However, it will take time, believes the federal minister, since we are “at the beginning of the formation of rules and standards. »

“Markets already prefer to invest in green companies and companies that have sustainable standards,” she said. But it is difficult for investors to know who is truly green, who is practicing a sustainable approach. With international standards, we will help investors. »

Some questions surrounding the Montreal office of the ISSB remain unanswered. It is not yet known where exactly the organization will be located in the metropolis. While the hiring process is ongoing, it was not possible to get an idea of ​​the recruitment target.

The ISSB is hosted by the IFRS Foundation, a not-for-profit organization that created the IFRS accounting standards. These aim to standardize the presentation of data across the world.

Tuesday’s announcement coincides with the first meeting of the IFRS Foundation trustees in Montreal, which runs June 28-30. These trustees are responsible for the governance, oversight and funding of the foundation.