The ISSB has unequivocally released its first sustainability standards, IFRS S1 and S2. These standards are designed to bolster confidence in company disclosures pertaining to sustainability and assist investors in making well-informed decisions.
The Standards establish a standardized way of communicating how climate-related risks and opportunities impact a company’s future. This promotes a shared understanding among stakeholders.
ISSB Chair Emmanuel Faber will officially launch the Standards at the IFRS Foundation’s annual conference on 26th June 2023 and through a week of events hosted by stock exchanges around the world, including those in Frankfurt, Johannesburg, Lagos, London, New York, Santiago de Chile; the ASEAN Capital Markets Forum is also hosting a launch event in Singapore.
The objective of IFRS S1 is to require an entity to disclose information about its sustainability-related risks and opportunities that is useful to primary users of general-purpose financial reports in making decisions relating to providing resources to the entity.
The objective of IFRS S2 Climate-related Disclosures is to require an entity to disThe objective of IFRS S2 Climate-related Disclosures is to require an entity to disclose information about its climate-related risks and opportunities that is useful to primary users of general-purpose financial reports in making decisions relating to providing resources to the entity.
Both fully incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The ISSB created IFRS S1 and IFRS S2 after receiving feedback from the market and responding to requests from the G20, the Financial Stability Board, and the International Organization of Securities Commissions (IOSCO), as well as business and investor leaders.
Today represents the outcome of more than 18 months of intense work to deliver an inaugural set of sustainability disclosure standards for the global capital markets. The ISSB Standards have been designed to help companies tell their sustainability story in a robust, comparable and verifiable manner. We have consulted closely with the market to ensure the Standards are proportionate and will result in disclosures that are relevant for investment decision-making.
Emmanuel Faber, ISSB Chair
Adoption of the ISSB Standards
Now that IFRS S1 and IFRS S2 have been issued, the ISSB will work with jurisdictions and companies to support adoption. The first steps will be creating a Transition Implementation Group to support companies that apply the Standards and launching capacity-building initiatives to support effective implementation.
ISSB will work with jurisdictions and GRI to streamline reporting when using ISSB Standards alongside other reporting standards.
Source – IFRS S1/S2
