ISSB: publication of first IFRS Sustainability Disclosure Standards

Keywords: Mazars, Thailand, ISSB, IFRS, Sustainability, IOSCO 

3 August 2023

IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2 – Climate-related Disclosures (available here). The standards are intended to provide a globally recognised baseline for reporting on the financial effects of sustainability-related risks and opportunities. The publication of the standards was particularly welcomed by IOSCO (the International Organization of Securities Commissions) in a press release published by the IFRS Foundation Monitoring Board, of which IOSCO is a member (available here). 

The standards are the culmination of a process lasting more than 18 months, building on preparatory work of the Technical Readiness Working Group that was published in late 2021. The ISSB then launched a four-month public consultation at end-March 2022, followed by several months of redeliberations to take account of the feedback on the draft standards. 

IFRS S1 and IFRS S2 are built on the concepts set out in IFRS Accounting Standards, notably the concept of materiality of information, and are intended to ensure that companies disclose all information that is relevant to investors or other finance providers in their decision-making processes. 

IFRS S2 takes account of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and requires both sector-agnostic and sector-specific disclosures. For the latter, entities shall draw on the guidance based on the standards published by the Sustainability Accounting Standards Board (SASB). 

The ISSB’s Transition Implementation Group will now work with jurisdictions and entities to facilitate the implementation of the standards, as well as any interactions with other sustainability reporting frameworks (particularly the standards published by the Global Reporting Initiative, as well as the European Sustainability Reporting Standards (ESRS)). 

The ISSB is now planning to look at other topics, beyond climate, and on 4 May it launched a Request for Information on its future work plan. 

A future edition of Beyond the GAAP will feature a detailed summary of the content of IFRS S1 and IFRS S2.