ISSB September 2023 Updates
Monthly updates from International Sustainability Standards Board
Welcome readers to our new monthly series that provides a summary of developments at ISSB, before starting we will try and explain what is ISSB and why are they important to us? Let me try and explain this in simple words:
You know how some companies are like superheroes and some are like villains? For example, some companies make cool stuff that can save the world, or some companies do evil stuff that can destroy the world. Well, ISSB is like a spy agency that wants to help these companies reveal their secrets and their plans to everyone. ISSB was born in 2021, which is two years ago, and they made two gadgets (Standards) in 2023, which is this year. These gadgets (standards) tell the companies what information they should disclose and how they should disclose it, so that everyone can understand and compare them. This way, we can know which companies are good guys and which ones are bad guys.
To know more about ISSB please visit : ISSB Website
Coming back to the topic in hand, below is a summary of Key items discussed in the ISSB September 2023 podcast. If you want to listen to the complete podcast please visit the Link.
Introduction: In a recent ISSB (International Sustainability Standards Board) podcast, Sue Lloyd, the Vice Chair of the ISSB, and Emmanuel Faber, the Chair, provided valuable insights into the board's recent activities and future plans. They discussed a wide range of topics, including the ISSB's standards, global adoption, stakeholder engagement, and upcoming events. In this blog post, we'll provide a comprehensive summary of their discussion.
Progress Since July: The podcast kicked off with a reflection on the ISSB's achievements since July. One major highlight was the endorsement of their standards by IOSCO (International Organization of Securities Commissions) and the completion of the TCFD's (Task Force on Climate-related Financial Disclosures) work. Additionally, the ISSB and ESRs (Enterprise Sustainability Reporting Standards) were found to be highly aligned in terms of climate-related disclosures.
Three Key Buckets of Activities: Emmanuel Faber outlined three primary areas of focus for the ISSB following these milestones:
Implementation Support for IFRSs:
The ISSB is actively working on capacity-building efforts, including creating training materials and a knowledge hub for preparers. This will help organizations understand and implement the ISSB's sustainability reporting standards.
The Transition Implementation Group, consisting of experts from various jurisdictions, has been appointed to address implementation questions and provide guidance.
The ISSB is also consulting on a taxonomy to make it easier for digital systems to process sustainability-related financial disclosures. This is crucial for streamlining reporting processes.
Adoption:
The ISSB is engaging with jurisdictions worldwide to encourage the adoption of their standards. Many countries, including Nigeria, Singapore, Brazil, Hong Kong, Japan, Canada, the UK, and Australia, are actively considering adopting these standards.
To assist jurisdictions in their adoption journey, the ISSB is developing an adoption guide that will provide guidance and ensure consistency and comprehensiveness in reporting standards.
Future Development:
The ISSB has concluded two important consultations: the Agenda Consultation and the SASB (Sustainability Accounting Standards Board) standard consultation. These consultations gathered feedback from stakeholders, which will be considered as part of the ISSB's future work plan.
The ISSB plans to finalize its work plan in the first half of the next year. This work plan will guide their priorities and projects in the coming years.
Stakeholder Engagement: The ISSB has been actively engaging with stakeholders globally. Sue Lloyd highlighted various interactions, including meetings in Australia, Africa Climate Week, and engagements in China. These interactions aim to support capacity-building initiatives and gather feedback for the ISSB's ongoing work.
Interoperability Discussions in Brussels: Emmanuel Faber discussed his visit to Brussels, emphasizing the importance of interoperability discussions. The ISSB has been working on achieving a high degree of alignment around climate-related disclosures and inserting investor materiality definitions in ESRs, ensuring full interoperability. Efforts are underway to create a shared navigation tool with European market participants.
International Applicability of SASB Standards: Sue Lloyd provided insights into the ISSB's efforts to enhance the international applicability of SASB standards, ensuring they align with ISSB standards. Feedback from stakeholders was encouraging, with a focus on making the standards more user-friendly and removing jurisdiction-specific references. Draft updates will be shared with stakeholders before finalization.
Climate Week and TNFD: The ISSB is gearing up for Climate Week in New York, where they will participate in discussions and engage with stakeholders. Sue Lloyd mentioned the launch of the TNFD's final recommendations, emphasizing the alignment between TNFD and ISSB work. The ISSB sees the TNFD recommendations as a source of inspiration for future projects.
Conclusion: The ISSB's recent podcast provides a comprehensive overview of their activities and achievements. From global adoption efforts to international applicability enhancements, the ISSB is actively working towards establishing sustainability reporting standards that benefit investors and stakeholders worldwide. With continued stakeholder engagement and partnerships, the ISSB is poised to make a significant impact on sustainability reporting in the financial industry. Stay tuned for more updates after their October Board meeting.