Have a say in shaping the future of global sustainability reporting standards
The first two International Sustainability Standard Board (ISSB) reporting standards were issued in June, and we responded to their release, celebrating a milestone day for sustainability reporting.
The standards have been positioned as the ‘comprehensive global baseline for sustainability disclosures’, specifically designed to meet the information needs of investors. While report preparers are now grappling with the new asks brought about by these standards (which some may choose to apply from financial years starting 1 January 2024 or earlier), the ISSB is now gearing up for the future and determining what its next priorities should be.
The ISSB is inviting views from stakeholders to help shape its work plan for the next two years via a consultation. The Request for Information Consultation on Agenda Priorities is now open and comments (via a survey, linked below, or letter) must be submitted by 1 September 2023.
Considering the consultation
Specifically, the consultation asks all those interested in sustainability-related financial reporting for their views on:
- The strategic direction and balance of the ISSB’s activities;
- The suitability of criteria for assessing which sustainability-related matters (including topics, industries, and activities) to prioritise and add to the ISSB’s work plan; and
- A proposed list of new research and standard-setting projects that could be added to the ISSB’s work plan.
More information about the consultation is available via the IFRS website, however a few key points that are front of mind for ICAS are:
1. The sustainability reporting landscape is changing globally in other ways beyond the ISSB’s two existing standards, and we advocate that ISSB’s first priority should be to support the proper implementation of these standards. At present, adoption of these standards is voluntary. Where they are followed, sound adoption of these standards will help both report preparers and users, today and in the future. But we need to make sure that the act of reporting doesn’t overburden report preparers, and thereby divert disproportionate resources away from business-critical tasks, like actually decarbonising business activities and operations.
2. We believe sustainability reporting would be better for investors and serve more report users if it covered both the impact of and impact to a company of environment and social matters. As such, we are advocating for interoperability of these ISSB standards (driven by financial materiality) with the GRI standards (driven by impact materiality) so that we can reach the end goal of double materiality. That is why we believe it is imperative that there is a high level of collaboration between the ISSB and GRI, as well as EFRAG (developers of the new European standards that adopt double materiality).
3. There is much to address in terms of urgent real-world crises. It is not clear what capacity for new projects that the ISSB has or what the ISSB’s overall scope will be. We urge resources to be channelled to what will be additional to and leverage existing ongoing programmes by other organisations, like TNFD (Taskforce for Nature related Financial Disclosures) which is due to be released in September 2023.
Responding to the consultation
The Sustainability Panel at ICAS is pooling together further ideas and perspectives, and will submit a response to this consultation. We are also contributing to joint responses from the related regional and global organisations of which we are a member.
This call for feedback from the ISSB presents a golden opportunity to have your say about how the foundations already laid, which so far concern general requirements and climate-related disclosures, can be built upon in the short term.
We encourage our members and other stakeholders to form and share their thoughts, and play their part in influencing the sustainability reporting of the future, by completing the ISSB’s survey.