A new global standard setter for company climate disclosures will be chaired by Emmanuel Faber, the former head of French yoghurt maker Danone and long-time advocate of sustainable business.
Faced with a patchwork of norms for companies disclosing to investors how climate change affects their business, G20 leaders at the COP26 UN climate change conference last month backed the creation of a new International Sustainability Standards Board, or ISSB.
It plans to launch its first global 'baseline' company climate disclosure standards in the second half of 2022, though it will be up to each country to decide if and how they are applied.
Regulators want more rigour and coherence in disclosures to stamp out greenwashing, or companies exaggerating their climate-friendly credentials as trillions of dollars pour into sustainable investments.
The "alphabet soup" of disclosure practices currently in place is impairing the ability of markets to channel capital into sustainable investments, Faber said.
"Greenwashing is basically paralysing everyone," Faber told Reuters.
"One of the reasons I was excited about joining this initiative is we will significantly reduce the greenwashing noise."
Faber, 57, has been appointed for an initial three-year term and will be based in Frankfurt.
In March he was ousted as chairman and chief executive of Danone after coming under pressure over margins and sales.
He will enter history for promoting core business units around environmental, social and governance (ESG) objectives in the food sector, which triggers one-third of greenhouse gas emissions, Forbes magazine wrote on the boardroom turmoil in March.
Read More: Danone, Unilever, L'Oréal Among Firms Earning 'Triple A' Scores On CDP Environmental List
"I worked 20 years to start the food revolution that is one of the two pathways to a transition. I want to act now at its next frontier," Faber later tweeted in October.
Over 40 jurisdictions, including the United States, Japan, China and Britain have welcomed the ISSB, and likely endorsement of its standards by the world's securities regulators will also help the new body gain traction.
The ISSB is part of the IFRS Foundation, whose International Accounting Standards Board writes accounting rules used in about 140 countries.
Although the European Union's executive European Commission has announced support for the ISSB, the bloc has already moved ahead with its own, more ambitious climate disclosures for companies.
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