(Paris) Corporate accounting finally tackles the climate: the body that manages accounting standards in use in 140 countries and jurisdictions published its first extra-financial standards on Monday, including a long-awaited one to harmonize carbon emissions figures. corporate greenhouse gases.
Today, most large companies report how many tons of carbon they release into the atmosphere each year, but these statements are generally unreliable. This vagueness feeds generous communication strategies associated with greenwashing, making companies appear more virtuous than they really are.
In an attempt to impose a universal rule, the IFRS foundations, accounting standards managers of the same name, launched at COP26 in 2021 an International Non-Accounting Standards Board (ISSB), chaired by the former boss of Danone Emmanuel Faber , which unveiled its first two standards on Monday, applicable from 2024.
The goal: for investors to have reliable data on whether they are investing in companies that are highly exposed to climate risk and how their equity portfolio may suffer: for example concerning an automotive supplier faced with the prospect of a car ban new thermal units in the European Union in 2035.
The standards will ensure “that what they actually do is detailed in a language that is common to all companies”, explains to AFP Emmanuel Faber, who claims the advent of carbon accounting.
The new climate standard, called IFRS S2, defines how companies will have to account for their direct and indirect emissions, building on an already widely used, but not mandatory method, the Greenhouse Gas Protocol. The standard will oblige companies to have their carbon figures audited and to define a climate strategy at the highest level.
Countries seem well on their way to making this standard mandatory: Japan, United Kingdom, Singapore, Hong Kong, Brazil, Nigeria… lists Emmanuel Faber, who hopes that China, the world’s second largest economy, will also apply it.
The European Union is developing its own standards with a much more ambitious scope, including biodiversity or human rights. But the standards should be compatible, hopes the ISSB, which will tackle these other areas next.
The ISSB doesn’t go as far as others, like the UK and EU, but having basic standardization is a good thing, says Kate Levick, subject matter expert at the E3G think tank, because it could avoid “the nightmare”, for multinationals, of having to comply with as many standards as countries. “The whole point is to hold companies accountable,” she sums up.