There continues to be increasing reporting expectations from multiple jurisdictions, along with continued demand from investors for transparent and comprehensive climate reporting. It has amplified the complexity for global companies in applying and adhering to numerous new reporting requirements.
In response to some of these challenges and to promote global consistency and comparability in climate and other sustainability-related disclosures, in May 2024 the International Sustainability Standards Board (ISSB) and European Financial Reporting Advisory Group (EFRAG) issued a joint publication of Interoperability Guidance. Further, the ISSB continues to recognize the importance of working with other standard setters to achieve a coherent global reporting landscape.
Following our discussions in the Spotlight on IFRS – June 2024, there have been developments in sustainability reporting in California and European Union (EU).
The most notable progress in the third quarter was made on the amendments to California’s climate laws. The proposals on the GHG emissions and climate risk disclosure laws were signed by the California Governor and enacted into law on September 27, 2024, providing some reporting relief but maintaining their 2026 effective dates.
Additionally, there has been a continuous flow of guidance from the EU. This includes the release of frequently asked questions (FAQ) to assist companies within scope of the Corporate Sustainability Reporting Directive (CSRD), the opening of the new European Sustainability Reporting Standards (ESRSs) Q&A platform, and the introduction of the Corporate Sustainability Due Diligence Directive (CSDDD) that sets corporate sustainability due diligence obligations.
It is important for companies to monitor the issuance of various laws and reporting requirements that may apply to them and continue to move forward with their adoption and implementation.
We have a number of resources to help you with sustainability related financial reporting topics as follows:
- Sustainability reporting resource centre - which features a range of high-level visual overviews, video blogs, articles and analysis to help companies get ready for the ISSB Standards
- IFRS Today webpage - which includes podcasts and articles on emission schemes, net-zero commitments, climate related matters and other changes in the financial reporting landscape that are relevant for all companies
- Financial reporting in uncertain times resource centre - which features a range of articles, blogs, and podcasts to explore the potential accounting and disclosure implications
- Climate change financial reporting resource centre - which provides additional resources to help you identify the potential financial statement impacts for your business of climate-related risks and opportunities.
In terms of IFRS Accounting Standards, the IASB is continuing to move forward on a number of projects, amendments and IFRS Interpretation Committee Agenda Decisions. In addition, although not effective in 2024 or 2025, companies should be aware that the IASB published new Accounting Standards IFRS 18 General Presentation and Disclosure and IFRS 19 Subsidiaries without Public Accountability: Disclosures, and also issued new amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments. The latest information on the new standards and amendments are provided in the below sections, Major projects and new Accounting Standards and Other developments.
In addition, refer to our Guides to financial statements – which includes an update to annual financial statements for disclosure requirements effective in 2024.
