eBooks & Guides

The inaugural sustainability and climate standards IFRS S1 and IFRS S2 launched in June 2023. S1: asks for the disclosure of material information about a company's sustainability-related risks and opportunities. It uses the same definition of material that is used in IFRS Accounting Standards. S2: sets out the disclosure of material information about climate-related risks and opportunities, including disclosure about physical risks (such as flood risk), transition risks (such as regulatory change), and climate-related opportunities (such as new technologies). Established at COP26 in late 2021, the ISSB has developed a comprehensive global baseline of sustainability disclosures designed specifically to be integrated into financial reports; the initial two standards focus on general sustainability disclosure requirements (IFRS S1) and climate-related disclosure (IFRS S2). The International Sustainability Standards Board is part of the IFRS Foundation and integrates/consolidates the Climate Disclosure Standards Board (an initiative of CDP and the basis for recommendations released by the TCFD.) and the Value Reporting Foundation (VRF, which consolidated the Integrated Reporting Framework and the SASB Standards). ISSB International Sustainability Standards Board and IFRS S1 and IFRS S2 ABOUT These standards are released by the ISSB, which does not have the authority to mandate the standards. However, with endorsement from the International Organization of Securities Commissions (IOSCO) and linkage to the widely adopted International Accounting Standards Board (IASB) financial standards, the new standards will become a mandate in most capital markets around the world. Many national authorities like the UK have already declared their intention to adopt the ISSB standards as the basis for their own national sustainability reporting regulations. IMPORTANT TO KNOW THE RECENT UPDATE: LEGAL STATUS Financial Materiality Focus: The ISSB was established to develop disclosure standards for financial reports. This distinction diverges from the ESRS and the GRI, which are concerned about both the impact on the planet and the bottom line of the reporting companies. NEXT STEPS: The consultation period for the ISSB has just ended. ISSB will now deliver on its promise for more comprehensive guidance and tools, as well as the relevant digital taxonomies to aid in implementation. Sustainability & Energy Management Simplified

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