It’s in companies’ own interests to adopt global sustainability standards

illuminem summarizes for you the essential news of the day. Read the full piece on The Financial Times  or enjoy below:

🗞️ Driving the news: Milton Friedman’s doctrine on corporate responsibility remains relevant today, urging businesses to maximize value while adhering to societal rules
• The International Sustainability Standards Board (ISSB), created in November 2021, is working to establish a global baseline for sustainability reporting, essential for identifying material business risks
• With final standards published in June, jurisdictions representing over half of global GDP are moving toward adopting these guidelines

🔭 The context: Despite societal changes due to factors like climate change and digitization, the responsibilities of company owners, boards, and executives remain consistent
• The ISSB standards aim to unify ESG reporting frameworks, simplifying the process for companies and providing clearer insights for investors

🌍 Why it matters for the planet: Adoption of ISSB standards is critical for businesses to align strategies with sustainability goals by identifying and disclosing material risks and opportunities
• The standards also introduce the principle of proportionality, benefiting small and medium-sized enterprises by allowing gradual improvements in sustainability reporting

⏭️ What’s next: As national consultations progress, board directors face a decision—advocate for ISSB standard adoption or risk undermining crucial sustainability disclosures
• These insights are vital not just for investors but for the long-term success of the companies

💬 One quote: “Has a board discharged its duty to the company if it has not compelled management to identify the material sources of risk and opportunity at the nexus of the business?”

📈 One stat: Jurisdictions representing more than half of global GDP are taking steps toward adopting the ISSB standards, indicating strong support for unified sustainability reporting

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