LOADING

Type to search

ISSB Climate Disclosures to Cover Full Gamut of Carbon Emissions

Climate Global News Sustainability

ISSB Climate Disclosures to Cover Full Gamut of Carbon Emissions

Avatar photo

The International Sustainability Standards Board (ISSB) of the IFRS Foundation has made significant progress refining its first two proposed sustainability-related disclosure standards―[draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and [draft] IFRS S2 Climate-related Disclosures.

At its October meeting, following careful analysis of the feedback on its proposed standards, the ISSB voted unanimously to require company disclosures on Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions, applying the current version of the GHG Protocol Corporate Standard. As part of these requirements, the ISSB will develop relief provisions to help companies apply the Scope 3 requirements. This relief will be decided at a future meeting and could include giving companies more time to provide Scope 3 disclosures and working with jurisdictions on so-called ‘safe harbour’ provisions.

Other key decisions taken during the October meeting include:

Clarifying key concepts in the proposed General Requirements Standard

  • The ISSB confirmed that its requirements will focus on meeting the information needs of investors.
  • It has decided to modify language in the proposals that was not clearly understood, including removing the term ‘enterprise value’ from the objective and the assessment of materiality and removing the term ‘significant’ to describe which sustainability risks and opportunities to disclose. The ISSB will have further discussions to refine its articulation of these concepts.
  • The ISSB has also confirmed it will use the same definition of material as is used in IFRS Accounting Standards and will discuss at a future meeting the need for further guidance on how to determine what is material information.

Facilitating interoperability with jurisdictional requirements

  • The ISSB prioritised several key topics for decision making during its October meeting to facilitate the ongoing dialogue with jurisdictions that are working on jurisdiction-specific disclosure requirements― such as the EU―to ensure the ISSB’s global baseline of sustainability disclosures is interoperable, and can be built on, with jurisdiction-specific requirements.
  • This included confirming use of the Task Force on Climate-related Financial Disclosures (TCFD) architecture as the basis for its Standards; confirming the GHG decisions as described above; and modifying some disclosures and language in relation to transition plans to facilitate alignment.

See related article: Tae-Young Paik and Elizabeth Seeger appointed as inaugural members of the IFRS Foundation’s ISSB

Setting out its approach to determining its future agenda priorities

  • Responding to feedback received to its consultation on the proposed Standards, the ISSB has decided that it will focus its future work on two components―foundational work supporting the adoption and application of its first two Standards; and, new areas of work on which it will consult in the first half of 2023.
  • The foundational work will include providing supporting materials and developing a digital taxonomy to enable digital reporting; enhancing SASB Standards by making targeted improvements to make them more internationally applicable; coordinating work with the International Accounting Standards Board to support connectivity in the two boards’ requirements and considering operability with the work of others―including GRI and EFRAG; and researching areas for potential incremental enhancements to its proposed Climate Standard.

Next steps

Today (Friday 21 October), the ISSB will consider its plans to build on the SASB Standards. This will include deliberating the feedback on its proposals to include industry-based requirements―built on the SASB Standards―in its proposed Climate Standard.

The ISSB is carefully considering all feedback received on its proposals, while being conscious of the demand for the Standards to be finalised. Its aim is to complete deliberations on the proposed Standards around the end of 2022, with the view to issue the final Standards as early as possible in 2023.

A high-level summary of the meeting will be available in a podcast featuring ISSB Chair Emmanuel Faber and Vice-Chair Sue Lloyd next week, alongside a formal meeting summary―the ISSB Update.

Source: International Sustainability Standards Board

Tags:
Avatar photo
ESG News

ESG News provides full-length coverage of ESG events, trends, policies and thought-leaders shaping business today.

  • 1

You Might also Like

Leave a Comment

Your email address will not be published. Required fields are marked *