{"id":6425,"date":"2023-08-02T16:56:10","date_gmt":"2023-08-02T20:56:10","guid":{"rendered":"https:\/\/inspirgroup.com\/?p=6425"},"modified":"2024-07-08T15:41:51","modified_gmt":"2024-07-08T19:41:51","slug":"issb-global-sustainability-disclosure-standards-what-do-they-mean-for-ir-and-sustainability-professionals","status":"publish","type":"post","link":"https:\/\/inspirgroup.com\/en\/issb-global-sustainability-disclosure-standards-what-do-they-mean-for-ir-and-sustainability-professionals\/","title":{"rendered":"ISSB global sustainability disclosure standards \u2014 What do they mean for IR and Sustainability professionals?"},"content":{"rendered":"

ISSB global sustainability disclosure standards<\/strong><\/h3>\n

What do they mean for IR and Sustainability professionals?<\/strong><\/h4>\n

The International Sustainability Standards Board (ISSB) was formed in November 2021 at COP26 in Glasgow to develop standards for a high-quality, comprehensive global baseline of sustainability disclosures focused on investor and the financial market needs. ISSB issued its inaugural global sustainability disclosure standards in June 2023: the IFRS S1 and IFRS S2. These new reporting standards take effect for annual reporting periods beginning on, or after, January 1, 2024 and establish core content for a complete set of sustainability-related disclosures in general purpose financial reports.<\/p>\n

These standards, when combined, establish a common language that responds to the capital markets\u2019 needs prior to investing for a truly global baseline of decision-relevant, comparable information about a company\u2019s sustainability-related risks and opportunities. IFRS S2 specifically refers climate-related risks and opportunities. Linking financial performance with sustainability-related risks and opportunities, therefore enables investors to make more informed investment decisions in the short, medium, and long term.<\/p>\n

InspIR addresses below some key questions related to this milestone standard, particularly its relevance for issuers and, more specifically, for IR and ESG professionals.<\/p>\n

#1. How are the IFRS S1 and IFRS S2 similar to current standards?<\/strong><\/p>\n

The new standards are not completely new; they build on well-established standards and frameworks to provide a complete, consistent and holistic understanding of how sustainability-related risks and opportunities can affect a company\u2019s financial prospects.<\/p>\n

Using the Task Force on Climate-Related Financial Disclosures (TCFD) core content structure, an approach currently followed by many companies around the world, IFRS S1 and S2 build on Integrated Reporting concepts to also incorporate sustainability-related risks and opportunities. When deciding which risks and opportunities to address, IFRS S1 and S2 rely on the Sustainability Accounting Standards Board (SASB) as the main source to determine material topics, together with industry practices and other complementary frameworks. When deciding what information to disclose about material topics, the new standards refer to the same frameworks as for materiality, also adding Global Reporting Initiative (GRI) standards and the European Sustainability Reporting Standard (ESRS).<\/p>\n

Companies that follow TCFD recommendations will already be providing information about their core content areas on climate-related issues. Similarly, those reporting according to SASB and GRI standards will already have much of the methodology and systems in place to report according to IFRS S1 and S2.<\/p>\n

#2. What are the main changes?<\/strong><\/p>\n

The transition will be easier for companies already following TCFD, SASB and GRI guidelines, or for those publishing integrated reports, than for companies which need to familiarize themselves with these well-established frameworks and standards.<\/p>\n

Main aspects to consider with IFRS S1 and 2 include:<\/p>\n