Destroying Energy Security, Part 2

Destroying Energy Security, Part 2

These three articles examine the potential effects of incorporating climate change and sustainability measurements in audited financial statements.

Note that the SEC’s current proposals are restricted to climate change, while international organizations also include sustainability measurements.

While many groups, such as Climate Action 100+, are trying to coerce corporations into including ESG measures in their reporting, these articles show how ESG measures can be made a legal requirement.



In 1973, the “Professional accounting bodies of Australia, Canada, France, Germany, Japan, Mexico, Netherlands, United Kingdom/Ireland and the United States formed the International Accounting Standards Committee (IASC) and agreed to adopt International Accounting Standards for cross-border listings.”

This led to the establishment of the IFRS in 2000, with Paul Volcker as Chairman.

International cooperation on financial standards benefited corporations and investors.

New Direction

However, a dramatic change took place during the UNFCCC’s COP 26 meeting in Glasgow on November 3, 2021, with this announcement by the IFRS:  

“As world leaders meet … to address the critical and urgent issue of climate change, the IFRS Foundation Trustees announce three significant developments to provide the global financial markets with high-quality disclosures on climate and other sustainability issues:

      • Establishment of the International Sustainability Standards Board (ISSB)
      • Consolidation of the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF), where the VRF contains the SASB Standards
      • Publication of prototype climate and general disclosure requirements developed by the Technical Readiness Working Group (TRWG) established by IFRS

Together, these developments create the necessary institutional arrangements, set out in the Foundation’s revised Constitution, and lay the technical groundwork for a global sustainability disclosure standard-setter for the financial markets.”

This graphic from the iFRS website summarizes the current IFRS organization: 

The revised constitution makes it clear that sustainability standards are closely linked to financial disclosures. Quoting from the IFRS constitution:

 “2. The objectives of the IFRS Foundation are:

“(a) The IASB is responsible for developing a set of accounting standards (referred to as ‘IFRS Accounting Standards’) and the ISSB is responsible for developing a set of sustainability disclosure standards (referred to as ‘IFRS Sustainability Disclosure Standards’). These complementary sets of IFRS Standards are intended to result in the provision of high-quality, transparent and comparable information in financial statements and in sustainability disclosures.”

This is a game changer.

The stage is now set for a behind the scenes imposition by private not-for-profits to impose enforceable sustainability requirements on corporations around the world.

Greenhouse Gases

Reporting of GHG emissions depends on their source as defined by scope 1,2 & 3 emissions.

      • Scope 1 covers “direct greenhouse gas emissions that occur from sources that are owned or controlled by an entity.” 
      • Scope 2 includes “indirect greenhouse gas emissions that occur from the generation of purchased electricity, heat or steam consumed by an entity.” 
      • Scope 3 emissions are “indirect emissions outside of Scope 2 emissions that occur in the value chain of the reporting entity, including both upstream and downstream emissions.”


The security and exchange commission (SEC) has proposed a set of rules for companies to report their Scope 1 and 2 emissions, and scope 3 emissions under certain circumstances, in metric tons of CO2 equivalents. 

Note that reporting requirements are limited to climate change whereas the IFRS rules include sustainability.

It’s not clear whether the SEC has authority to issue such rules, and the rules, when issued, will undoubtedly be challenged.

The SEC’s proposal is separate from, and ostensibly independent of the IFRS’ efforts to have international accounting organizations, such as the FASB, adopt ISSB sustainability rules.

Efforts by the IFRS to have ISSB rules adopted by the FASB can proceed behind the scenes. This would be a back door method for imposing ISSB rules on American corporations.


The situation in Canada has been described this way:

“Canada has committed to adopting the International Financial Reporting Standards (IFRS) new Sustainability Disclosure Standard for sustainability-related disclosures (IFRS S1) and climate related disclosures (IFRS S2). It has begun by mandating Task Force on Climate-Related Financial Disclosures (TCFD) requirements for banks, and with the granting of an International Sustainability Standards Board (ISSB) office in Montreal, it is expected that the IFRS Sustainability Disclosure Standard will become mandatory in the very near future. “

The threat of climate and sustainability reporting is real. 

Part 3 will explore:

How these rules could affect corporations. And, indirectly, how they could affect personal investments.


Let others know about this article by using this link in an email

. . .



Please follow and like us:

4 Replies to “Destroying Energy Security, Part 2”

  1. Donn,
    Thank you for your excellent work. Truly, you do a thorough job of digging up important info.
    One concern I have is: The U.S. Does not have an Energy Policy. Only a policy to weaken America. Here is a link to John Kerry and his Leftist/Marxist influence. 161. John Kerry, Far Left Support, Fox News Aug 2022:
    Others in the Biden Administration are similarly harmful to our country. Such as Joe Goffman in EPA and Gina McCarthy another Climate advisor of Biden’s. All they care about is killing American conventional energy. Wind and solar cannot replace the over 102,600 MW’s of coal and nuclear power capacity tha has been shut down since 2011.