The International Sustainability Standards Board (ISSB) is to issue its first reporting standards by the end of June, its technical strategy lead has confirmed.
Two standards, based on existing drafts, will be issued in the second quarter of the year, Rommie Johnson, ISSB technical strategy lead at the International Financial Reporting Standards (IFRS) Foundation, said on a recent webinar.
Documents published by the IFRS stated the body backs requirements for IFRS S1 and IFRS S2 will be effective for annual reporting periods beginning on or after 1 January 2024. This means a business would report its first sustainability-related disclosures in 2025.
IFRS S1 sets out the core baseline for sustainability reporting, designed to be adhered to globally.
The General Requirements Exposure Draft sets out the core content for complete sustainability-related financial disclosures, establishing a comprehensive baseline of sustainability-related financial information.
Under the rule, companies would disclose material information about all sustainability-related risks and opportunities to which it is exposed.
IFRS S2 addresses more specific topics, such as climate change, and seeks to lay the groundwork for future sustainability-linked investment needs. Primarily, it will seek to generate comparable climate-related disclosures, building upon existing standards and frameworks, including the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations.
But individual jurisdictions may set their start dates and have the authority to set whether the new standards will be mandatory.
The upcoming rules have been touted as a significant milestone in the use and proliferation of sustainability-linked data in the investment universe.
Speaking at COP27 in November, ISSB chair Emmanuel Faber said: “The need for climate-related financial disclosures is increasingly urgent.
“We are working collaboratively towards the implementation of effective sustainability disclosures for capital markets, which will empower market participants with the right information to support better economic and investment decision-making.”
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