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On February 17, 2023, the International Sustainability Standards Board (ISSB), at its meeting on 16 February 2023 in Montreal, has taken its final decisions on all the technical content of its initial Standards, agreed that its initial IFRS Sustainability Disclosure Standards, S1, and S2, will become effective starting January 2024.
The intention for ISSB’s work is to deliver a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make informed decisions.
What are the key progresses achieved by ISSB in 2022?
Comparison of ISSB guidance to TCFD's recommended disclosures
Requirements to use scenario analysis in climate disclosures
Requirements to report Scope 3 emissions in climate disclosures (read more here)
Plans in 2023 to increase focus on biodiversity and nature
Plans to integrate just transition elements into their framework
What we can expect from the ISSB in 2023?
Effective Date: ISSB Inaugural Standards to Issue by End Q2 2023. And the ISSB agreed that its initial IFRS Sustainability Disclosure Standards, S1 and S2, will become effective starting January 2024.
Interoperability of ISSB & ESRS: ISSB members agreed to reference European Sustainability Reporting Standards (ESRS) within an appendix to S1—the ISSB’s general requirements standard—as a source of guidance companies may consider, in the absence of a specific ISSB standard, to identify metrics and disclosures if they meet the information needs of investors. (In April 2021, the European Commission adopted a legislative proposal for a Corporate Sustainability Reporting Directive (CSRD) that requires companies within its scope to report using a double materiality perspective in compliance with European Sustainability Reporting Standards (ESRS) adopted by the European Commission as delegated acts)
Impact on Existing Frameworks: ISSB Chair Emmanuel Faber also mentioned that companies already using the TCFD Recommendations and SASB Standards will be in a strong position to use S1 and S2. In addition, technical representatives from GRI and the International Sustainability Standards Board (ISSB) began work on delivering the agreed MOU last year to further harmonize the sustainability reporting landscape at an international level.
Capacity building: To ensure its accessibility globally, the ISSB is planning on developing further guidance and training material, and delivering a core capacity-building program across different economic settings, so that all market participants can access its benefits.
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