ISSB standards timeline: A ‘new era’ for sustainability reporting
The standards will be effective for periods beginning on or after 1st January 2024
The standards will be effective for periods beginning on or after 1st January 2024
The release of the first-ever climate-related disclosure standards by the International Sustainability Standards Board (ISSB) has been celebrated by market participants as a pivotal moment in the realm of business reporting.
Ever since the ISSB’s creation in 2021, the objective has been to provide a high-quality worldwide baseline for sustainability disclosures, with an initial emphasis on detailed climate-related requirements.
With the news that the UK government will adopt the ISSB standards, Accountancy Age has compiled a brief timeline of all the key events.
During the COP26 climate change conference in November 2021, Erkki Liikanen, the Chair of the IFRS Foundation Trustees, revealed the establishment of the
The ISSB was tasked with creating a comprehensive and globally accepted set of high-quality sustainability disclosure standards to fulfil the informational requirements of investors.
The IFRS Foundation also revealed plans to integrate the Climate Disclosure Standards Board (CDSB), which is an undertaking by the Carbon Disclosure Project (CDP), and the Value Reporting Foundation (VRF).
Following COP26, Emmanuel Faber was announced as the inaugural chair of the ISSB by the IFRS Foundation. Faber previously worked as the CEO at Danone, and he was renowned for championing ESG objectives, but he was controversially ousted from his role in 2021.
Sue Lloyd was also revealed as the Vice Chair. Loyd’s professional journey has involved various roles within investment banking across the United Kingdom and Australia, alongside her tenure as a member of the Australian Accounting Standards Board (AASB).
In March 2022, the ISSB issued its first two Exposure Drafts, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
IFRS S1 defines the guidelines that businesses need to adhere to when they report on the sustainability-related risks and opportunities they encounter. IFRS S2 focuses on both climate-related risks and opportunities, intended for use in conjunction with IFRS S1.
The ISSB announced the inception of a working group comprising representatives from various jurisdictions. The group aimed to facilitate a constructive exchange, fostering improved alignment between the exposure drafts from the ISSB.
The establishment of the working group was part of a comprehensive outreach initiative aimed at fostering input and involvement from all jurisdictions and stakeholder categories regarding the ISSB’s consultation process.
The ISSB and the International Accounting Standards Board (IASB) announced their intentions regarding the forthcoming responsibilities, governance, and evolution of the Integrated Reporting Framework and Integrated Thinking Principles within the Value Reporting Foundation (VRF).
This meant the Integrated Reporting Framework would become part of the materials of the IFRS Foundation.
The IFRS Foundation and the VRF announced the finalisation of their consolidation to better align their sustainability reporting efforts with an effective date on July 1st, 2022.
The ISSB revealed that it will offer transitional aid to companies they it implements the two sets of sustainability standards.
This support aimed to enable companies to concentrate on divulging details concerning climate-related risks and opportunities in their first reporting year.
From the following year , companies will be obligated to complete comprehensive reports encompassing sustainability-related risks and opportunities that extend beyond just climate considerations.
The ISSB formally issued its first two standards, haling it as a “new era” for sustainability-related disclosures in capital markets worldwide.
According to the ISSB, the standards will help to enhance reliance and assurance in corporate sustainability disclosures, thereby improving investment choices.
The standards will be effective for periods beginning on or after 1st January 2024.
The International Organisation of Securities Commissions (IOSCO) declared its approval of the Standards put forth by the ISSB, subsequent to conducting an extensive evaluation.
IOSCO has now urged its 130 member jurisdictions, which encompass capital markets and regulatory bodies overseeing over 95% of the global securities markets, to contemplate the integration of ISSB Standards within their individual regulatory frameworks. This integration is intended to ensure consistency and the ability to compare sustainability-related disclosures on a global scale.
The UK government recently revealed its decision to adopt the ISSB sustainability standards as it looks to home in on its 2050 net zero target.
In a statement, The Department for Business and Trade announced that the disclosure standards in the UK will outline guidelines governing the manner in which companies convey their sustainability-related risks and opportunities and will be based on the ISSB standards.