Practical guidance on sustainability standards released

Practical guidance on sustainability standards released

Dec 19, 2023

Ahead of the introduction of IFRS S1 and IFRS S2, the International Sustainability Standards Board (ISSB) has produced new resources to help with implementation

The IFRS S1 General Requirements for Disclosure of Sustainability‑related Financial Information and IFRS S2 Climate-related Disclosures will come into force from January 2024.

The guidance focuses on how to help companies consider ‘nature and social aspects’ of climate-related risks and opportunities when applying IFRS S2, but does not affect the fundamental principles in the standards.

It includes three detailed examples that help illustrate how companies might approach these aspects of their climate-related disclosures.

The publication follows the launch of the IFRS Sustainability knowledge hub at COP28, a core component of the IFRS Foundation’s focus on capacity building initiatives.

The work is part of an ongoing campaign to support the implementation of the standards.

The ISSB is also working on the development of the IFRS Sustainability Disclosure Taxonomy to enable the digital consumption of information when the ISSB standards are applied. This is set to be published in the first half of 2024.

At the December board meeting in Frankfurt, following public consultation and deliberations on feedback from the market, the standard setter agreed on updates to the SASB standards.

These targeted updates ‘enhance the international applicability of the SASB standards, which are an important source of guidance for companies applying IFRS S1’, the ISSB said.

The updates remove and replace jurisdiction-specific references and definitions without significantly altering industries, topics or metrics.

IFRS S1 requires companies to disclose material information on all sustainability-related risks and opportunities that could reasonably be expected to affect their prospects. IFRS S2 sets out the requirements for climate-related disclosures.

For risks and opportunities beyond climate, IFRS S1 directs companies to sources of guidance and requires companies to refer to and consider the industry-based SASB standards.

The updated SASB standards will be available this week.

The ISSB continues to discuss feedback on its consultation on future priorities with a view to finalising its two-year workplan in the first half of 2024. Included in these discussions is consideration of how the SASB standards can be enhanced and built upon.

The ISSB also remains focused on supporting and driving adoption of the ISSB standards throughout 2024. As part of this work, it continues to prioritise discussions about interoperability, including with jurisdictional and voluntary initiatives focused on stakeholders, and will continue to coordinate its work with the International Accounting Standards Board (IASB).

The first joint technical meeting of the ISSB and IASB will take place in January 2024 when the boards will discuss the feedback received in response to the ISSB’s agenda consultation about a potential project for further integration in reporting.

The IFRS Sustainability Symposium will also take place in New York on 22 February 2024.