The Sustainability Accounting Standards Board has approved a staff recommendation for the board to update its standard covering asset management and custody activities by removing the systemic risk management disclosure topic and linked metrics.

According to an official meeting summary, the board will now consider drafting changes before taking a final vote on the amendments.

Summing up the outcome, SASB technical lead Bryan Esterly said he believed the board was at the “finish line on this project”.

Overall, the amendments received strong support from several leading asset managers.

In one comment letter, the Asset Management Group of the Securities Industry and Financial Markets Association said the continued inclusion of the topic undermined “the effectiveness of the Asset Management & Custody Activities Standard.”

And in a June 15 comment letter, BlackRock Inc added its backing to the amendments.

SIFMA AMG complained the disclosures were “outdated” and did not “align with environmental, social, and governance information commonly requested by asset manager stakeholders.”

The SASB issued its proposals on 16 March of this year, giving interested parties until June 15 to comment.

Staff emphasised, however, that the project has no impact on the systemic risk management or disclosure topic, nor on the associated metrics, in the commercial banks, insurance, and the investment banking and brokerage standards.

In addition, the board also canvassed constituent views on enterprise risk management in the context of asset management in custody activities.

Staff reported, however, that feedback received provided little by way of actionable suggestions.

In a separate development, the SASB on Friday released a briefing on how Canada’s Public Sector Pension (PSP) Investment Board integrated SASB standard into its ESG metrics.

The PSP had some CAD $204.5bn (€142bn) of assets under management as at 31 March, 2021 invested on behalf of over 900,000 active and retired scheme members.

The manager said in the briefing it seeks to “capitalise on the significant investment opportunities that can arise as companies put sustainability at the centre of their strategies and operations.”

FRC’s thematic review of IAS 37, Silent Night report

Meanwhile in the UK, the Financial Reporting Council has released a report into its thematic review into International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets.

The audit watchdog said the way companies were applying the standard was “a recurrent problem area”.

IAS 37 requires entities to recognise a provision where a legal or constructive present obligation exists as a result of a past event, payment is probable, and the entity can reliably estimate the amount.

The amount of any provision is the best estimate of the amount required to settle the obligation at the reporting date.

The FRC said companies were not always getting to the right decision on whether a transaction should be accounted for under IAS 37 or another standard such as IAS 19.

FRC director Carol Page said it was crucial companies address the issue so investors could gain a better understanding of risks such as climate change.

Finally, the FRC has also released the full report of its disciplinary tribunal into events surrounding the Silentight pension scheme.

Headline details of the findings against audit and services firm KPMG, as well as a former partner at the firm, were first made public in August.

KPMG told IPE: “This report makes difficult reading. We accept the findings of the tribunal, and we regret that the professional standards we expect of our partners were not met in this case and that it has taken over a decade to reach this point.”

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