Date posted: 01/02/2024 5 min read

Setting the standard: Sue Lloyd FCA

From the humble childhood goal of wanting to be an accountant, Sue Lloyd FCA has risen through the ranks to become one of the world’s foremost authorities on accounting standards – and her work has only just begun.

Brief bio

  • Sue Lloyd FCA has a master’s degree in accounting and finance from the University of Auckland. After graduating, she worked as an investment banker in Australia and the UK, and served as a member of the Australian Accounting Standards Board (AASB).
  • Prior to becoming an International Accounting Standards Board (IASB) member, Lloyd worked for the International Financial Reporting Standards (IFRS) Foundation as a senior technical director, leading the development of new IFRS accounting standards.
  • She served as a member of the IASB from 2014 and as IASB vice-chair from 2016 to 2022.
  • In March 2022, she was elected vice-chair of the International Sustainability Standards Board.

By Cameron Cooper
Photography by Dan Burman

Sue Lloyd FCA considers herself lucky. Few people get to combine a deep technical expertise in finance and accounting with a role that helps financial markets and the planet. As vice-chair of the International Sustainability Standards Board (ISSB), based in London, that is just how it is playing out for the New Zealander.

“I feel very, very fortunate to have been in the right place at the right time,” she says. “It’s incredibly exciting to have the opportunity in your career to build on something that you know very well – like the standard-setting process and financial reporting – but then pivoting to take that into a totally new sphere of sustainability reporting.”

Lloyd assumed the ISSB role in March 2022 and sees it as a perfect fit for her skill set, as the organisation pursues its mission to embed a global baseline of sustainability disclosures that are focused on the needs of investors.

Seeking a new challenge after an eightyear tenure at the International Accounting Standards Board (IASB), she had already been playing a key role in the establishment of the ISSB as a member of the Technical Readiness Working Group, set up to give the ISSB a head start. Lloyd quickly realised that she loved the subject matter and the invigorating nature of the work.

“That’s why I decided to take the chance and put my hand up to be vice-chair of the new board,” she says.

Stellar career

Lloyd’s high-powered international work is a far cry from her serene days growing up in New Zealand. She never really had any doubts about the career she wanted to pursue.

“It feels like an unusual aspiration for a teenager in New Zealand, but I wanted to be an accountant,” she recalls.

Now living in London and acknowledged as possessing one of the world’s sharpest minds when it comes to accounting standards, Lloyd reflects that accounting gave her a great career start, “and the rest of it has really been a combination of good opportunities and grabbing them when they came along”.

Lloyd believes her curiosity has helped propel her career, “I’m somebody who likes to know the answers to things. I really like to dig into technical detail.”

That passion for knowledge and technicalities has never left her – “I was always somebody who was into the details” – and has served her well during her career, first as an investment banker in Australia and now in standard setting. “I really enjoy the combination of the technical side of my work and the strategic focus, as well as meeting so many different stakeholders all over the world,” Lloyd says.

When asked to list her three career highlights she nominates: chairing the Interpretations Committee at the International Financial Reporting Standards (IFRS) Foundation and driving it to be more proactive and responsive; leading improvements to banks’ credit risk management in the wake of the global financial crisis, which resulted in her being dubbed the ‘mother of IFRS 9’ financial instruments; and her current ISSB job where she takes charge of the technical work related to standards.

A good foundation

Lloyd credits her early days in accounting and investment banking for giving her the fundamental skills that aided her career. “Having accounting skills as a core has always been super helpful to me to fall back on,” she explains.

Likewise, working as a banker in the relatively small Australian market proved a godsend. “If you’re an investment banker in London or New York, you tend to be very specialised and know a lot about one topic. But if you work in Australia, you need to be able to do a whole range of different structured transactions, and that really sets you up to have a broad range of perspectives and skills early in your career. That’s really served me well every day as a standard setter.”

Lloyd enjoys problem-solving, fielding complex questions and being the one to come up with solutions. “In banking, doing structured transactions, I needed to do that,” she says. “And then somebody came to me and said, the ISSB needs to publish these new sustainability reporting standards within a year. Do you think you can get that done?”

That challenge sealed her direction, being appointed vice-chair of the ISSB.

In addition to technical nous, Lloyd believes communication skills are crucial.

“I enjoy the process of taking a complex transaction and working out how to communicate it in terms of accounting or financial reporting. I also really enjoy talking to people about what we do. Whether you’re an investment banker working on structured transactions, or whether you’re the vice-chair of the ISSB, that same interest and ability to communicate has been something that has served me well.”

Sue Lloyd FCA 

Global baseline

The IFRS Foundation trustees announced the creation of the ISSB at the COP26 global summit in Novemer 2021, paving the way for the release in June 2023 of two standards on sustainability and climate-related disclosures – IFRS S1 and IFRS S2 – that are designed to establish a comprehensive and consistent global baseline for sustainability reporting.

S1 requires companies to communicate to investors the sustainability-related risks and opportunities they face, factoring in governance, strategy and risk management, as well as any relevant metrics and targets. S2 requires the disclosure of material information in relation to climate-related physical and transition risks and climaterelated opportunities.

Although devising the two standards was a daunting task, Lloyd says lead-up work by the Technical Readiness Working Group and others smoothed the way for the exposure drafts that were published early in 2022. In response, the ISSB received about 1400 letters of comment, while board representatives spoke to more than 30,000 people to garner their views on the drafts and any suggested amendments. “You can imagine how much feedback we had to digest,” Lloyd says.

The comprehensive approach, she adds, has resulted in robust standards and “incredible support” for consistent sustainability disclosures.

Lloyd is proud, too, that the standards do not overly burden smaller companies, or those which are relatively new to sustainability reporting.

“We wanted to ensure that we had mechanisms in place that were proportionate and which meant you can have simpler approaches for some companies in some circumstances, and that they were truly global standards that can be used in emerging markets by smaller companies and larger companies all around the world.”

The ISSB welcomes the call from the body that brings together the world’s securities regulators, the International Organization of Securities Commissions (IOSCO) for its 130 member jurisdictions to incorporate the two standards into their respective regulatory frameworks, with Lloyd remarking that this is “a super important endorsement for us and a positive sign.”

Implementation under way

Now, the hard work begins with the implementation phase. To that end, Lloyd says considerable efforts have been made to ensure the requirements of S1 and S2 are scalable. “We say that you need to use the information that’s available to you without undue cost and effort.”

She notes that transitional relief provisions mean reporting entities will only need to report sustainability risks and opportunities in relation to climate in the first year, effectively creating a phase-in period within the standards themselves. The ISSB is also encouraging jurisdictions to carefully consider the pace at which they introduce the standards and to which companies they first apply S1 and S2. “So, I think all of these mechanisms are really helpful.”

As companies respond to the standards, Lloyd advises them to resist “waiting until they can do a perfect job” with disclosures, pointing out that estimations are permitted.

“We’re encouraging people to get going because it’s really important to start getting this information out there in the market. But it’s also useful for companies to make sure they understand the climate-related risks and opportunities they themselves have when they run their businesses.”

As Australian and New Zealand companies apply the standards, Lloyd says they should be especially conscious of domestic characteristics. Australia is a mining stronghold, and for New Zealand its strength is in agriculture. “As a result, there will be very particular sustainability reporting requirements that will be important to think about.”

Finally, Lloyd urges companies to assemble appropriately skilled teams internally – or to get the right external support – to manage S1 and S2.

“Accountants have got a huge role to play here. This is a fabulous opportunity for the profession to really get engaged in a new type of financial reporting that’s really important.”

The next steps

With the standards having been released, Lloyd and her technical team will not be putting up their feet. Their focus now turns to working with jurisdictions, companies, investors and others to promote the use of S1 and S2 – or what Lloyd calls the “aftersales service” phase.

“We’ll be playing our part in supporting capacity building to prepare the market globally for this new type of reporting.”

The ISSB has also identified four potential priority areas requiring its attention – biodiversity, ecosystems and ecosystem services; human capital; human rights; and integration in reporting. With her term as vice-chair to run until 2026, and with the prospect of an extension, Lloyd can focus on these issues and myriad others related to her passion for standard setting.

Meanwhile, she encourages Australian and New Zealand accountants to embrace the opportunity to specialise in sustainability reporting and disclosures, noting that accounting professionals from both countries have long punched above their weight internationally.

“I don’t think it’s by accident,” she says. “I think it’s the training for accountants in Australia and New Zealand, and the sophistication of the profession, and the fact that they are very used to applying judgement. There’s a really fabulous opportunity to get engaged and work in an exciting part of reporting and sustainability going forward.”

Such foresight from accountants could potentially mirror Lloyd’s courage many years ago to make the switch from a successful investment banking career to joining the Australian Accounting Standards Board and “get hooked” on standard setting.

“I’ve really benefited from looking for opportunities and seizing them, and I really encourage others to do that.”