In a significant step towards enhancing transparency and accessibility of sustainability information, the International Sustainability Standards Board (ISSB) has released the Proposed IFRS Sustainability Disclosure Taxonomy for public comment. The digital taxonomy aligns with the disclosure requirements set forth in the ISSB’s initial two Standards—IFRS S1 and IFRS S2.
With the increasing demand for sustainability-related financial information among investors, a common digital taxonomy becomes crucial to streamline structured digital reporting. Such reporting will be prepared based on the ISSB Standards, leading to improved global accessibility and comparability of sustainability data for investors.
In tandem with the development of IFRS S1 and IFRS S2, the ISSB has been diligently working on its digital taxonomy. The ultimate goal is to make sustainability-related financial disclosures readily consumable in a digital format once the ISSB Standards are implemented.
The ISSB welcomes feedback on the Proposed IFRS Sustainability Disclosure Taxonomy during the 60-day consultation period, which concludes on September 26, 2023. During the second half of 2023, the ISSB will carefully review all the feedback received. The aim is to issue the final digital taxonomy in early 2024, taking into account the input from stakeholders.
ISSB Chair Emmanuel Faber emphasized the importance of facilitating digital consumption of sustainability-related financial information. He stated, “Investors increasingly consume information digitally, therefore it’s important that we facilitate digital consumption of sustainability-related financial information. Our proposed digital taxonomy is designed to make it easier for investors to extract, compare and analyze the information companies provide.”
The IFRS Sustainability Disclosure Taxonomy is expected to play a role similar to the IFRS Accounting Taxonomy. It will enable digital tagging of the information required by the IFRS Standards, fostering efficiency and accuracy in data handling. However, it is essential to note that these taxonomies differ from those established by jurisdictions to categorize economic activities as environmentally sustainable.
The ISSB is actively engaging with stakeholders to explore opportunities for enhancing interoperability with various sustainability-related requirements. This collaboration seeks to create a seamless framework for reporting and analyzing sustainability data, promoting consistency and comparability across the board.
To foster greater understanding and awareness of the Proposed IFRS Sustainability Disclosure Taxonomy, the ISSB will host a webinar on August 3, 2023, at 09:00 BST. The webinar will feature ISSB Member Bing Leng, who will delve into the intricacies of the proposals. Additionally, attendees will have the opportunity to participate in a Q&A session, enabling them to seek clarifications and insights.
The ISSB’s efforts in developing a digital taxonomy for sustainability disclosure underscore their commitment to promoting transparency, standardization, and accessibility in the realm of sustainability reporting. By streamlining digital consumption of sustainability information, investors and stakeholders will be better equipped to make informed decisions that align with sustainable business practices. As the 60-day consultation period commences, the ISSB encourages stakeholders worldwide to actively participate in shaping the future of sustainability reporting through this groundbreaking initiative.
