International Sustainability Standards Board (ISSB), Chair Emmanuel Faber kicks off International Financial Reporting Standards (IFRS) Sustainability Symposium with remarks on the ISSB’s progress to date and the upcoming publication of the ISSB Standards.
According to an announcement made today, the new global sustainability and climate disclosure standards will go into effect in January 2024. The new reporting standards are expected to be published by the end of the second quarter of 2023, with companies beginning to issue disclosures in accordance with the standards in 2025. According to the ISSB, the decision to set the 2024 effective date was made in response to “strong investor demand for companies globally to disclose comprehensive, consistent, and comparable sustainability-related information.”
The ISSB was officially launched in November 2021 at the COP26 climate conference, with the goal of developing IFRS Sustainability Disclosure Standards to provide a global baseline of disclosure requirements that jurisdictions can use independently or as part of larger reporting frameworks. The board released the first exposure drafts for its first two reporting standards, covering general requirements for sustainability-related financial information and climate-related disclosures in March 2022.
The mid-2023 release date corresponds to IFRS Chair Erkki Liikanen’s recent announcement at the WEF Forum in Davos that the standards would be finalised in June. Liikanen also stated at the Forum that after the standards are released, the ISSB will consult on a number of issues, including reporting on biodiversity, human capital, and human rights, as well as the connection of financial reporting with sustainability reporting.
In addition to announcing the 2024 effective date, the ISSB made final decisions on all of the technical content of the standards at its meeting on Thursday, indicating that the standards’ substance has now been fully agreed upon.
In the absence of a specific ISSB standard, the ISSB also voted to include a reference to the GRI standards and the European Sustainability Reporting Standards (ESRS) as sources of guidance for companies to consider when applying the IFRS’ general sustainability reporting standard (“S1”). “Now, we will work with regulators around the world to play their part in creating the conditions for adoption within their markets, so that investors can use comparable information about sustainability-related risks and opportunities in their investment decisions without delay,” Faber said.
As the ISSB prepares to release the finalised standard and businesses prepare to begin reporting against the new standards, the board stated that it will focus its efforts on developing additional guidance and training material, as well as working with partners to deliver a core capacity building programme across various economic settings.