The International Sustainability Standards Board (ISSB), established at COP26 to develop a comprehensive global baseline of sustainability disclosures for the capital markets, today launched a consultation on its first two proposed standards
One sets out general sustainability-related disclosure requirements and the other specifies climate-related disclosure requirements.
When the ISSB issues the final requirements, they will form a
comprehensive global baseline of sustainability disclosures designed to
meet the information needs of investors in assessing enterprise value.
The ISSB is working closely with other international organisations and
jurisdictions to support the inclusion of the global baseline into
jurisdictional requirements.
The ISSB is seeking feedback on the proposals over a 120-day consultation period closing on 29 July 2022.
It will review feedback on the proposals in the second half of 2022 and
aims to issue the new Standards by the end of the year, subject to the
feedback.
The proposals have been developed in response to requests from G20
leaders, the International Organization of Securities Commissions
(IOSCO) and others for enhanced information from companies on
sustainability-related risks and opportunities. The proposals set out
requirements for the disclosure of material information about a
company’s significant sustainability-related risks and opportunities
that is necessary for investors to assess a company’s enterprise value.
Later this year, the ISSB will consult on its standard-setting
priorities. This consultation will include seeking feedback on the
sustainability-related information needs of investors when assessing
enterprise value and on further development of industry-based
requirements, building on SASB Standards, which address a broad range of
sustainability matters. Also today, the ISSB has set out its plan for how its work will build on the SASB Standards and industry-based standard-setting processes.
Emmanuel Faber, Chair of the ISSB, said:
Rarely do governments, policymakers and the private sector
align behind a common cause. However, all agree on the importance of
high-quality, globally comparable sustainability information for the
capital markets. These proposals define what information to disclose,
and where and how to disclose it. Now is the time to get involved and
comment on the proposals.
Ashley Alder, Chairman of the IOSCO Board, said:
IOSCO welcomes the publication of the ISSB’s two proposed
IFRS Sustainability Disclosure Standards. We will review the proposals,
with the objective to endorse them for use by our member jurisdictions.
Endorsement by IOSCO can pave the way for adoption of the Standards
around the world, delivering much-needed consistency and comparability
in sustainability-related information to the capital markets.
Mary Schapiro, Head of the TCFD Secretariat, said:
By building on the TCFD's framework, the ISSB's climate
proposals will create further consistency, comparability and reliability
across climate disclosure so investors can make more informed financial
decisions. I welcome and support the ISSB's work, which will bring
further transparency on the financial impacts of climate change.
The ISSB’s proposals build on the work of the Climate Disclosure
Standards Board, the International Accounting Standards Board, the Value
Reporting Foundation (which houses Integrated Reporting and SASB
Standards), the TCFD and the World Economic Forum.
Development of IFRS Sustainability Disclosure Standards follows an
inclusive and transparent due process, consistent with that used to
develop IFRS Accounting Standards. As required by the IFRS Foundation’s Constitution,
the IFRS Foundation Trustees’ Due Process Oversight Committee has
overseen the decision by the ISSB Chair and Vice-Chair to publish these
exposure drafts before the ISSB is quorate.
IFRS Sustainability Disclosure Standards are intended to provide a
global baseline and to be compatible with jurisdiction-specific
requirements, including those intended to meet broader stakeholder
information needs. Thus, in addition to commenting on the ISSB’s
proposals, stakeholders are encouraged to respond to other relevant
public consultations being undertaken by jurisdictions on sustainability
reporting.
Taxonomy
Initial proposals for an IFRS Sustainability Disclosure Taxonomy,
enabling structured electronic tagging of a company’s sustainability
disclosures, will be published shortly.
Webinars
The proposals will be presented in two live webinars on 28 April at
9am and 5pm BST. Information on how to register will shortly be
announced.
Access
Additional information
- [Draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information sets out the
overall requirements for disclosing sustainability-related financial
information about all its significant sustainability-related risks and
opportunities, to provide the market with a complete set of
sustainability-related financial disclosures.
- The [draft] IFRS S1 also provides guidance on how to identify and
develop appropriate disclosures about sustainability-related risks and
opportunities not addressed by an IFRS Sustainability Disclosure
Standard using the disclosure topics in SASB Standards and the CDSB
Framework application guidance for water- and biodiversity-related
disclosures.
- [Draft] IFRS S2 Climate-related Disclosures sets out the specific requirements for the identification, measurement and disclosure of climate-related financial information.
- Enterprise value is the total value of a company―the market value of
its equity and its net debt. Information that could be relevant to the
assessment of enterprise value is broader than information reported in
the financial statements. It includes information about a company’s
impacts and dependencies on people, the planet and the economy when
relevant to the assessment of the company's enterprise value.
- The proposals build on the prototypes prepared by the Technical
Readiness Working Group (TRWG). The TRWG was created by the IFRS
Foundation Trustees in March 2021 to provide recommendations to the then
proposed new board. Access further information on the TRWG’s remit and members.
IFRS
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