Caroline Clark-Maxwell, IFRS Foundation: “If everyone could understand each other, we could do the impossible.”

The IKEA Foundation helps many organisations accelerate their efforts in combating climate change. Facts and figures speak for themselves, but who exactly are the people behind this extraordinary work? In this storytelling series, we spotlight brave individuals who move mountains in their climate action strategies and solutions. Today: Caroline Clark-Maxwell, ISSB Technical Staff at the IFRS Foundation.

I’m part of the generation that’s grown up with climate change being a super pressing issue, but growing up I didn’t really know whether and how I could make a difference. It was when my older brother founded a B2B alternative fuel company in 2006 that I saw how people close to me engaged actively to mitigate climate change. This inspired me to do a combined business degree with a degree in Energy, Natural Resources and the Environment in Norway. ’I think that these defining moments made me realise that I could make a difference through my business skills and my passion for sustainability and climate.

Prototype climate standard

After working in a strategy consulting firm in London ’for a few years, I joined a project called the Impact Management Project (IMP). This project was focused on facilitating dialogue between the leading sustainability frameworks and standard-setting initiatives. Specifically, I was working with CDP (the former Carbon Disclosure Project), the Global Reporting Initiative and the three organisations that are now consolidated into the International Sustainability Standards Board (ISSB) – the International Integrated Reporting Council, the Sustainability Accounting Standards Board and the Climate Disclosure Standards Board.

One of the earlier things I was doing at IMP was helping those organisations to communicate how their combined frameworks and standards could be a starting point for a comprehensive corporate reporting system. As part of this, we developed a prototype climate standard, which became the starting point for the ISSB Standard on climate-related disclosures.

Information is powerful

I don’t think I could have predicted what was going to happen after we published the prototype climate standard. However, when the IFRS Foundation started taking notice of our work as part of looking into establishing an International Sustainability Standards Board, I realised that there was a huge opportunity to make a real difference.

There are lots of investors who recognise the need to take sustainability risks and opportunities considerations into how they decide which companies to invest in, but there’s a problem: because companies report what they’re doing, sustainability-wise, in lots of different ways, it’s really hard for investors to build sustainability considerations into their investment processes in a consistent way. That’s the same problem that existed for financial reporting before the IFRS Foundation published IFRS Accounting Standards, which became widely adopted. So, it was a big deal that the IFRS Foundation was getting involved.

 I know sustainability-related financial disclosure standards can seem dry – and I’m not pretending that they’re going to solve climate change. That’s not what we’re here to do – we’re here to provide information. But with better information, better decisions can be made. And climate-related disclosures is an area where I have skills to bring to the table.

Teamwork on steroids

What I’ve learned through this job is that there are a lot of fantastic ideas, initiatives and people out there that can help solve some fundamental problems. But there aren’t enough resources to bring those ideas together in a way that’s greater than the sum of their parts. What I love about my job is that I get to work with many of the ideas and initiatives that have been proposed around the world to solve the problems of climate disclosures, and to work together with a board of highly experienced and diverse individuals to try to create a whole that’s greater than the sum of the parts.

Right now, I feel very proud. The ISSB has just published first two Standards, one of which covers climate-related disclosures. It’s been a tough, time-pressured year. That’s because the Standards we’ve been working on were needed urgently. At the same time, we had to ensure the same high-quality Standards that the IFRS Foundation is known for.

Everyone across the organisation has been working together towards the publication. Publishing these Standards have only been possible through the vision and commitment of the leadership, the rest of the ISSB and all the staff coming together. Through this teamwork ‘on steroids’, we’ve been able to deliver something incredible. It’s an amazing moment.

Tower of Babel

If I could speak at COP28, I’d tell the story of the Tower of Babel, which I vividly remember learning as a child. It’s a religious story, about the origins of why we speak so many languages. In the story, humans are united because they speak the same language, and they build this tall tower up to the sky. The god in this story, observing this, realises having this common language means humans can do the impossible. So, God makes sure humans speak different languages and scatters the people across the world.

As a child, I thought that was incredibly cruel. But as an adult, I believe that the moral of this story is that if everyone could understand each other then we’d be able to do the impossible. Working to solve climate change is, in many ways, about gathering people together to try to do something that sometimes seems impossible.

And I’d remind the people listening that a common language of how companies are mitigating and adapting to climate change is necessary to not only support financial stability in capital markets, but to hopefully also mobilise global capital towards climate change – even if this isn’t our organisation’s primary objective.

To achieve this, we’re going to need help from everyone in that room. We need to enable companies to speak effectively to investors because that’s how better decisions can be made. We need companies to apply the standards, advisers to support companies in the application of the standards, investors to ask for and use the information, and academics to educate and build capacity. Alongside that we need jurisdictions to mandate the standards.

Sky is no longer the limit
But the really cool thing is that this has happened before. The IFRS Foundation is the organisation that facilitated global adoption of standards for companies to report on their financial health. Now it’s within that organisation to replicate that for climate and sustainability standards.

My hope for the future is that we get a more open and transparent conversation between investors, companies and other stakeholders on sustainability and climate-related matters.

ABOUT

Caroline Clark-Maxwell is an ISSB technical staff member at the IFRS Foundation, leading the work at staff level to develop the ISSB’s inaugural Climate-related Disclosure Standard. The ISSB is developing—in the public interest—standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets. In June 2023, the ISSB published its two inaugural Sustainability-related Disclosure Standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.

The IKEA Foundation supports the work of the IFRS Foundation’s International Sustainability Standards Board to develop global standards for companies’ disclosure of sustainability-related risks and opportunities to help investors make informed decisions.