Reprinted from GreenFin Weekly, a free newsletter. Subscribe here."Gradually, then suddenly," as Ernest Hemingway once described going bankrupt. Feel familiar? The noise in the sustainability space has gradually grown louder over the past few years, most often via forward-looking aspiration: bold commitments, proclamations of renewed corporate purpose, even a (nominal) redefinition of the corporation’s role in society. But the past month marks the "suddenly" turning point. First, the SEC’s proposed rule on climate disclosure and, late last week, the International Sustainability Standards Board’s (ISSB) — the group chartered with creating a unified set of disclosure standards to meet investors' need for sustainability information — delivery of proposals that create a comprehensive global baseline of corporate sustainability disclosures. Why do the ISSB’s exposure drafts matter right now for issuers and investors, and what should sustainability professionals be doing to prepare? If you haven’t yet waded through the more than 500 pages of the SEC’s proposed climate rule and the 2 new weighty ISSB proposals, it might be time to start digging in. The two ISSB drafts — "General Requirements for Disclosure of Sustainability-related Financial Information" and "Climate-related Disclosures" — are open for comment until July 29, after which they will be finalized and, presumably, usable for companies. If you haven’t yet waded through the more than 500 pages of the SEC’s proposed climate rule and the two new weighty ISSB proposals, it might be time to start digging in. What are they building in there? Although SEC Commissioner and ESG headwind Hester Peirce rightly identified that her place of work is not the "Securities and Environment Commission," it appears she and other naysayers have not yet been introduced to the reasonable investor — the rational human of average wealth and ordinary financial sophistication who invests passively for the long term — of 2022. While it’s reassuring that Peirce knows where she works, has she not heard the $130 trillion asking, reasonably, for climate disclosure from issuers, as her boss has been talking about?    Despite this, ISSB Chair Emmanuel Faber said of his organization’s progress: "Rarely do governments, policymakers and the private sector align behind a common cause. However, all agree on the importance of high-quality, globally comparable sustainability information for the capital markets." He added: "These proposals define what information to disclose, and where and how to disclose it." So, headwinds aside, what in these drafts should reasonable investors and companies be paying attention to? Above all, the relationship between the SEC’s climate disclosure rule and the proposed ISSB standards. Here’s why: It’s likely that the SEC’s rule will not survive in its current form given political and industry pushback. Regardless, there is an overlooked — at least per my conversations — question in the SEC’s climate disclosure consultation. Please turn to page 289 in your copy of The Enhancement and Standardization of Climate-Related Disclosures for Investors to find the following passage in the request for comment: "An International Sustainability Standards Board (ISSB) has recently been created, which is expected to issue global sustainability standards, including climate-related disclosure standards. If we adopt an alternative reporting provision, should that provision be structured to encompass reports made pursuant to criteria developed by a global sustainability standards body, such as the ISSB?" I’ve heard from folks deeply plugged into this process that we can expect a resounding "yes!" to this question from investors. As such, a key takeaway about what standards to report against, and for whom, can be found in the exposure draft S1: "The Exposure Draft proposals were developed to be applied by entities preparing their general purpose financial statements with any jurisdiction’s GAAP (so with IFRS Accounting Standards or other GAAP)." (GAAP, for the non-economists among us, stands for "generally accepted accounting principles," the rules by which CPAs and auditors must play.) Translation: The ISSB proposal will apply to all public companies. That is, with or without the SEC, investors will continue asking for this kind of disclosure, built on the TCFD’s recommendations and incorporating industry-based disclosure requirements gleaned from SASB standards. Your move Is the proposed objective of disclosing sustainability-related financial information clear? Are the disclosure objectives for governance, strategy, risk management and metrics and targets clear and appropriately defined? Do you agree with the proposed disclosure requirements about the effects of significant climate-related risks and opportunities on an entity’s business model and value chain? These are just a few questions for which the ISSB is seeking stakeholder feedback to "inform its redeliberations to commence in the second half of 2022." The GreenFin readership is composed of some of the most influential stakeholders the ISSB needs to hear from. This is a pivotal moment for the institutionalization of sustainability into the core of our capital markets and economy, and your voice is critical. The future comes one day at a time, and we as a community have 115 days until the July 29 deadline) to let the ISSB know what we want that future to look like. Happy commenting! Adblock test (Why?)