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ESG Disclosures: ISSB to Enhance SASB Standards

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Key Updates from the International Sustainability Standards Board (ISSB):

On May 09, 2023, ISSB published an Exposure Draft Methodology for Enhancing the International Applicability of the Sustainability Accounting Standards Board (SASB) Standards, with comments to be received by August 09, 2023. Link

Adopted by more than 2,500 entities operating in over 70 jurisdictions, the SASB Standards consist of 77 industry-based sustainability-related disclosure standards. They include industry descriptions, disclosure topics, and associated reporting metrics to help entities identify and disclose sustainability-related risks and opportunities that provide useful information for users of general-purpose financial reports.

The SASB Standards serve as a primary source of guidance for applying IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) to help entities produce relevant and comparable disclosures in the absence of specific IFRS Sustainability Disclosure Standards. The proposed scope of application of the methodology described in this Exposure Draft excludes all SASB Standards metrics included in Exposure Draft IFRS S2 Climate-related Disclosures (Draft IFRS S2) published in March 2022. In descending order of preference, amendments to the SASB Standards metrics would be made by revision approaches:

  1. substituting available internationally applicable references for standards, definitions or calculation methods to replace jurisdiction- specific references;

  2. providing more generalised references for standards, definitions or calculation processes to replace jurisdiction-specific references;

  3. adopting generalised jurisdictional references to enable preparers to use applicable jurisdictional laws, regulations, methodologies or guidance to replace jurisdiction-specific references;

  4. removing—in a limited number of cases—disclosure metrics that are ill-adapted for international application or have no identified international equivalents outside specific jurisdictions; and

  5. removing and replacing jurisdiction-specific metrics when a relevant replacement can be identified to preserve the disclosure topic’s integrity—aligning with the intent of the original metric as much as possible based on research—to meet the needs of users of general purpose financial reports.

On May 04, 2023, The International Sustainability Standards Board (ISSB) seeks feedback on its priorities for its next two-year work plan. The Request for Information Consultation on Agenda Priorities is open for comments until 1 September 2023. Link

Based on research into the information needs of investors, the ISSB has identified four potential projects: three sustainability-related research projects—1) biodiversity, ecosystems and ecosystem services; 2) human capital; 3) human rights—and a fourth project researching integration in reporting. The feedback provided will inform both the ISSB’s work plan and its approach to future projects.

Next steps: The ISSB will continue the balloting process and expects to issue the two Standards towards the end of the second quarter of 2023.

GC Insights: On May 29, the Ministry of Finance of the People’s Republic of China has reposted the consultation on ISSB’s Exposure Draft Methodology for Enhancing the International Applicability of the Sustainability Accounting Standards Board (SASB) Standards calling inputs and participants from Chinese stakeholders in a bid to seek advises and balance the country’s practical applications of the ISSB standards to make it more adaptable for companies in the country. For the Chinese introduction of this consultation, please visit this link from the MoF.

If you are looking for ESG compliance solutions, feel free to contact us for a demo for ESG Connector, GC Insights proprietary ESG reporting platform is available for demo here.

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