- Three major developments are coinciding to make 2023 the year that started a new era for global investment policy and practice.
- New global sustainability and climate reporting standards, corporate income tax rules and a landmark WTO investment deal are soon coming into force.
- Governments and companies have an opportunity at the World Economic Forum's Annual Meeting of the New Champions to work together to get ready for and make the most of, these transformative changes.
The year 2023 will be remembered as the start of a new era for investment policy, facilitation and promotion. Three developments are coinciding to transform the global investment climate and are set to take centre stage during the World Economic Forum’s Annual Meeting of the New Champions in Tianjin, China.
First of all, a set of global sustainability and climate reporting standards has been established – a game changer for firms to disclosure risks and opportunities – and thus enable investors and societies to better allocate capital and support.
Secondly, new global corporate income tax rules will affect how countries can use fiscal investment incentives, leading to changes in the volume and distribution of global investment flows and stocks.
And third, a landmark World Trade Organization (WTO) investment agreement will create a common taxonomy, baseline, framework and resources to facilitate cross-border investment flows.
For these three reasons 2023 looks set to be an annus mirabilis for investment policy, facilitation and promotion. This article aims to help governments and firms position themselves for investment success by explaining what has changed and suggesting what may come next.
Fact 1: New global standards for sustainability and climate reporting by firms
After one-and-a-half years, the International Sustainability Standards Board (ISSB) has formulated two sets of global financial market standards that will be released on 26 June, with implementation to begin on 1 January 2024 – one for general sustainability reporting (IFRS Standard 1), and one for climate-related financial reporting (IFRS Standard 2).
These two sets of global standards were built on existing standards and benchmarks, moving sustainability regulation from an era of fragmentation to one of standardization. This process was launched by the IFRS Foundation, which has helped set global standards for financial reporting since being created in 2000.