On June 26, 2023, the International Sustainability Standards Board (ISSB) issued its inaugural standards — IFRS S1 and IFRS S2. IFRS S1 disclosures are intended to enable companies to communicate to investors about the sustainability-related risks and opportunities over the short, medium, and long term. IFRS S2 disclosures are specific climate-related disclosures that are designed to be used with IFRS S1. The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) provide the basis of both.
One idea behind the ISSB Standards is that they are designed so companies can include sustainability-related information alongside financial statements in one reporting package. The Standards can be used in conjunction with any accounting requirements. These standards are voluntary, but the ISSB is expecting that the IFRS sustainability standards will be adopted by the more than 140 jurisdictions that require the IFRS Accounting Standards. Thus, the IFRS Sustainability Standards could become mandatory.
Recently, I watched an IFRS Foundation sponsored “deep-dive” webinar. Broadcast on July 12, 2023, the webinar coveredIFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information—An In-depth Explainer with the ISSB In the webinar. ISSB Vice-Chair Sue Lloyd and ISSB Acting Executive Technical Director Bryan Esterly provided a detailed overview of IFRS S1. You can find the recording here. It is well worth an hour of your time!
Sue Lloyd noted that the ISSB Sustainability Standards and Global Reporting Initiative’s (GRI) Standards should be considered as a package for efficient reporting. Here is an excerpt from her comments:
…another important partner for us is the GRI, the Global Reporting Initiative. Working with them we hope that the combination of our Global Baseline which is laser focused on meeting investor needs alongside the GRI standards which have focused on broader stakeholder needs. As a package, can be an efficient reporting system to allow companies to report across their stakeholders.
Sue Lloyd
This brings home the continued relevance of the GRI Standards for depicting a company’s economic, environmental, and social impacts, risks, and opportunities for a broad range of stakeholders. I recommend learning about the IFRS Standards along with the GRI Standards. If you want to do consider taking the GRI Standards certified courses that I offer. My current training schedule is shown on my “Courses” website page.