Are "users of financial information" morally bankrupt? I don't think so.

I'm really struggling with the IFRS Foundation's Exposure Draft for the International Sustainability Standards Board (ISSB), because it seems to assume that all users of financial information are morally bankrupt.

According to the Exposure Draft, information "is material if omitting, misstating or obscuring that information could reasonably be expected to influence decisions that the primary users of general purpose financial reporting make on the basis of that reporting, which provides information about a specific reporting entity".

This definition would be ok — if it were predicated on the belief that those "users of general purpose financial reporting" are human beings that care about their families, friends, fellow humans, and everything on Earth that they depend upon to lead fulfilling lives.

That seems to me to be a reasonable starting point for *any* organisation to make regarding its target audience. But IFRS Foundation doesn't seem to think so. For some reason it sees its users as people who only care about stuff that happens if it *directly affects their wallet*. I find this staggering. I can't think of a single other organisation which starts from the premise that everyone it exists to serve is a sociopath.

This really matters: if you see your clients as sociopaths, you inevitably end up delivering a product tailored for sociopaths. And that seems to be exactly where IFRS Foundation is heading — by choice editing the information it's providing to its users, so that the vast majority of harmful impacts caused by companies go unseen.

Taking this to an extreme, imagine a company which:

• purchases raw materials from suppliers that employ children;
• to be used as inputs to factories which emit toxins into the air;
• in the manufacture of products which harm the people using them;
• which are delivered in single-use packaging which ends up in oceans.

Such a company could be labelled as a good ESG performer under the ISSB guidelines, if none of those destructive activities were negatively affecting its balance sheet.

This is of course already happening today, across all capital markets. The vast majority of ESG data are meaningless, as are the financial instruments built upon them. But what's so tragic is that ISSB now has a unique opportunity to become the *antidote* to all this. And instead it's falling into the same old trap.

Please, IFRS Foundation, think again about who your target audience is — not as some amorphous blob of 'mainstream investors', but as a rich and diverse group of individuals who — just like the rest of us — want to be part of the solution, not the problem.