The International Sustainability Standards Board (ISSB) is moving at pace to realise its ambition to create a global baseline for investor-focused sustainability reporting that local jurisdictions can build on.
It needs to decide what to focus on next after finalising its climate and general requirements standards1 in June 2023. It is seeking feedback from stakeholders via a consultation.
What’s the issue?
The ISSB has agreed it needs to split its time between:
- embedding the first standards on climate and general requirements; and
- focusing on new areas – e.g. choosing between biodiversity, human capital, human rights and integration in reporting.
The ISSB will determine which priorities to focus on over the next two years based on feedback.
What’s the impact?
The ISSB wants to understand where guidance is most urgently needed to help companies to report on all sustainability-related risks and opportunities as required under IFRS S1, not just climate.
This may lead to future IFRS® Sustainability Disclosure Standards because there is not yet a widely accepted standard for investor-focused disclosure across topics including biodiversity, human capital and human rights.
To support connectivity in reporting, the ISSB could work jointly with the International Accouting Standards Board (IASB) to build on the management commentary proposals and the Integrated Reporting Framework. Alternatively, it could work in parallel with the IASB on a separate project on integration in reporting.
Irrespective of the consultation outcome, the ISSB’s immediate priorities after finalising its first standards are encouraging jurisdictions to adopt them and supporting companies to apply them.
1 IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
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