ISSB promises further harmonisation in sustainability reporting

The International Sustainability Standards Board (ISSB) has set out its new two-year work plan aimed at further harmonisation of the sustainability reporting landscape. In particular, the ISSB will be focused on supporting the implementation of IFRS S1 and IFRS S2. It will also be further collaborating with the Global Reporting Initiative (GRI) and considering how to build upon the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). The ISSB noted that globally, disclosures on an entity’s plans to address any targets it has in place to transition to a lower-carbon economy are a growing proportion of corporate climate-related disclosures, and IFRS S2 requires that information be disclosed if an entity has such a plan. “To support application of these disclosure requirements and to reduce fragmentation in information provided in the market, the ISSB plans to support work to streamline and consolidate frameworks and standards for disclosures about transition plans,” said the ISSB. It said this will also align with the ISSB’s focus on supporting the implementation of IFRS S1 and IFRS S2 over the next two years. “The focus of the ISSB in this regard will continue to be on the provision of high-quality, decision-useful information about the plans that companies have, consistent with the focus of IFRS S2, rather than requiring that companies engage in transition planning, per se,” it said. The ISSB and GRI’s Global Sustainability Standards Board (GSSB) have committed to jointly identify and align common disclosures that address information needs under the distinct scopes and purposes of their respective standards, for both thematic and sector-based standard-setting, said the ISSB. “This collaboration seeks to provide a seamless, global and comprehensive sustainability reporting system for companies looking to meet the information needs of both investors and a broader range of stakeholders,” it said. Finally, the ISSB said it will look at how it might build from relevant initiatives to meet the information needs of investors as it embarks on its research project on biodiversity, ecosystems and ecosystem services. The ISSB said it has agreed that in undertaking this research, it will consider how to build upon the recommendations of the TNFD. ISSB chair Emmanuel Faber said: “As we embark on our new two-year work plan that will see us strengthen and build out the global baseline of sustainability-related financial disclosures, I am grateful to our partners in the sustainability reporting landscape for their commitment to delivering an efficient, effective sustainability disclosure system for capital markets.” Financial Stability Board chair Klaas Knot added: “The ISSB Standards strengthen the comparability, consistency and decision usefulness of climate-related financial disclosures around the world. The interest from users of disclosures in comparability and consistency applies to all elements of disclosures, including transition plans. The FSB is currently analysing the relevance of transitions plans for financial stability. So I welcome the ISSB announcement to support users of IFRS S2 in providing disclosures about their transition plans.”

ISSB promises further harmonisation in sustainability reporting

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