What’s next for the ISSB?

Global IFRS Institute | Sustainability reporting

• What are the ISSB’s areas of focus?
• What will the new research projects look at?
  
• Why does it matter?
• Actions for companies

Having published its first two standards¹, the International Sustainability Standards Board (ISSB) has now decided what it will focus on next.

To reach this point, it consulted with stakeholders to understand their views on important questions including how to balance time spent supporting implementation of the first standards with preparing for new ones.

The ISSB has decided to split its time between the following:

Supporting the implementation of IFRS S1 and S2 will include a range of activities such as creating educational materials and working with regulators and jurisdictions looking to adopt the ISSB^TM Standards.

This agenda decision means that other proposed projects on human rights and integration in reporting will not begin in the next two years.

The new projects are at the research stage. Any standard-setting work would come later, so the decision to focus on these topics does not mean that a new standard on BEES or human capital is expected in the near term.

A final feedback statement is expected in the next few months, but the ISSB has discussed that the new research projects on BEES and human capital will involve:

• investigating what information investors need on these topics;
• identifying potential synergies and gaps among existing disclosure standards; and 
• using those findings to identify ways to supplement IFRS S1 and S2.

The BEES research project will look at:

• whether a future ISSB standard could build on relevant components of existing standards including the TNFD² Framework and SASB³ Standards; and
• how the ISSB can enhance interoperability with GRI⁴ Standards and ESRSs⁵.  

Similarly, the human capital project will consider whether and how information can build on other existing frameworks, including SASB, the GRI and ESRSs. The scope of this project will also incorporate some aspects of reporting on human rights.

Globally companies are grappling with the challenges of applying new standards and frameworks (e.g. ISSB Standards, ESRSs and TNFD) in addition to existing standards (e.g. GRI and SASB Standards).

The ISSB is working closely with EFRAG⁶ and GRI to support interoperability of ISSB Standards with ESRSs and GRI Standards. Feedback to the recent consultation made it clear how crucial it is to work with other standard setters to achieve a coherent global reporting landscape and minimise the burden on those reporting under multiple frameworks. The proposed focus of the research projects demonstrates that the ISSB is responding to this feedback.

Companies applying IFRS S1 are required to report on relevant sustainability-related risks and opportunities relating to topics including BEES and human capital. Companies are directed to consider other sources of guidance (including GRI Standards, SASB Standards and ESRSs) to identify relevant metrics. The latest decisions give a clear signal to companies that any work to apply these other standards is likely to support reporting on BEES and human capital under future ISSB Standards.

• Look out for releases from the ISSB including:
  • educational materials and capacity-building support; and
  • the final feedback statement on its agenda priorities.
• Read our detailed guide on the first ISSB Standards to understand the framework that will be used to report on all sustainability-related risks and opportunities.
• Consider the requirements in existing frameworks and standards including TNFD, the GRI, ESRSs and SASB when preparing to apply the first ISSB Standards.