Exploring the Future of Reporting
Insights from the Joint Board Meeting ISSB and IASB January 2024
Introduction
In a special podcast edition, Su Lloyd, Vice Chair of the International Sustainability Standards Board (ISSB), and Linda Maon Hasser, Vice Chair of the International Accounting Standards Board (IASB), shared their thoughts and insights after the first-ever joint board meeting held in London. The focus of the meeting was on discussing feedback received on the ISSB's agenda consultation, particularly regarding a potential project on integration and reporting.
Background and Context
The ISSB had initiated a consultation on future priorities, including the possibility of a project on integration and reporting. Linda Maon Hasser highlighted the ongoing work on the management commentary exposure draft, recognizing the need for a comprehensive and structured framework that builds on innovations in narrative reporting. Additionally, the IFRS Foundation took over responsibility for the integrated reporting framework in August 2022, further emphasizing the importance of connectivity in reporting.
Integration and Reporting vs. Connectivity
The podcast discussion emphasized the distinction between integration and reporting and connectivity. Integration and reporting involve a specific way of reporting, utilizing tools such as the integrated reporting framework and management commentary. On the other hand, connectivity focuses on how the two boards collaborate and how information in financial statements connects with sustainability-related disclosures.
Feedback and Prioritization
The joint meeting delved into the feedback received from stakeholders on the potential integration and reporting project. Various perspectives emerged, with some suggesting a single corporate reporting framework, while others envisioned a conceptual framework. The meeting also highlighted the importance of prioritization, with approximately a quarter of respondents ranking integration and reporting as a higher priority than sustainability projects.
Acknowledging Legacy and Urgency
The podcast reflected a collective acknowledgment of the legacy built by the integrated reporting community, emphasizing the importance of having financial statements and sustainability information within the same framework. While integration and reporting were recognized as crucial, stakeholders expressed differing opinions on the urgency of the project. The discussion highlighted the need to focus on high-quality information to support better investment decisions.
Connectivity and Collaboration
The joint board meeting brought to light the existing collaboration between the ISSB and IASB, emphasizing the importance of connectivity as part of their operational DNA. Both boards recognized the need to work together seamlessly, with an emphasis on coherent, consistent, and connected disclosures. Linda Maon Hasser highlighted the unique challenge of having two sovereign boards under one foundation, underscoring the importance of alignment and collaboration.
Key Takeaways
Su Lloyd and Linda Maon Hasser shared their key takeaways from the meeting, emphasizing the commonality among board members, the need for improved communication about collaborative efforts, and the strategic importance of connectivity. Both boards expressed a commitment to work towards coherent, consistent, and connected disclosures that support better investment decisions.
Next Steps
While the joint meeting wasn't a decision-making session, it set the stage for future discussions and decisions. The ISSB will engage with its advisory body, the International Integrated Reporting and Connectivity Council, to gather expert advice. Both boards will continue their discussions, informing future decisions on agenda priorities and project directions.
Conclusion
The joint board meeting provided valuable insights into the complex landscape of integration, reporting, and connectivity in the world of sustainability and financial reporting. As the ISSB and IASB navigate these challenges, their commitment to collaboration and coherent reporting remains at the forefront, promising a future of more closely aligned standards and frameworks.