Norges Bank Investment Management (NBIM) has welcomed the International Sustainability Standards Board’s (ISSB) exposure draft on sustainability-related financial disclosure.

The Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft), sets out the overall requirements for an entity to disclose sustainability-related financial information about all its significant sustainability-related risks and opportunities, to provide the market with a complete set of sustainability-related financial disclosures.

NBIM, as the manager of Norway’s Government Pension Fund Global (GPFG), invests in 71 different countries and has assets under management of NOK 12.3bn.

In a letter to the ISSB, NBIM chief governance and compliance officer, Carine Smith Ihenacho and NBIM senior analyst, corporate governance, Séverine Neervoort, said that as a long-term investor, NBIM needs information on companies’ exposure to sustainability risks and opportunities, how these are managed, and relevant performance metrics.

“We rely on both information related to the current performance of a company (i.e. how and where it creates value today) and information on drivers of value that may be predictive of its long-term performance. Sustainability information supports investment decisions, risk management processes and ownership activities,” they wrote.

In particular, NBIM supports the ISSB’s decision to focus on information that is relevant for investors when they assess enterprise value.

“We hope that the IFRS Sustainability Standards will be recognised globally as the reference standards for reporting financially-material sustainability information. As other institutions develop standards for broader sustainability reporting, they could refer to the IFRS Sustainability Standards as a core, and only seek to add further topic-, region- or viewpoint-specific requirements (‘building blocks’ approach).

“The inter-operability of the IFRS Sustainability Standards with these other standards will be important to reduce the reporting burden for companies and ensure the comparability of disclosures. We welcome the ISSB’s efforts in this direction,” they stated.

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