IFRS Foundation Launches Guide to Help Companies Voluntarily Apply ISSB Sustainability Reporting Standards
The IFRS Foundation announced today the publication of a new guide aimed at helping companies to voluntarily apply the International Sustainability Standards Board’s (ISSB) recently issued climate and sustainability-related disclosure standards and communicate their progress to investors.
The IFRS Foundation’s International Sustainability Standards Board was launched in November 2021, with the goal to develop IFRS Sustainability Disclosure Standards to provide investors with information about companies’ sustainability risks and opportunities. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023.
Since the release last year, several regulators globally have announced plans to utilize the standards, with the IFRS reporting in May 2024 that more than 20 jurisdictions have decided to use the ISSB standards, or are taking steps to introduce the standards in their own frameworks, with the jurisdictions representing nearly 55% of global GDP, more than 40% of global market capitalization, and over half of global greenhouse gas emissions.
According to the IFRS Foundation, its new publication, “Voluntarily applying ISSB Standards—A guide for preparers,” aims to provide a tool for companies, particularly in jurisdictions without regulatory requirements to apply ISSB Standards, to meet investor demand to provide sustainability reporting in line with the new emerging standards. The IFRS Foundation noted that several major investors, including BlackRock, Vanguard, Capital Group and Neuberger Berman have encouraged application of ISSB Standards through proxy voting guidelines.
ISSB Chair Emmanuel Faber said:
“Companies around the world already provide investors with sustainability-related information in response to investor demand. However, they use a patchwork of frameworks and standards to do so, leaving investors unable to compare the performance and prospects of companies. With many frameworks and standards now consolidated into the ISSB, the voluntary application guide helps companies navigate from their current reporting practices to applying ISSB Standards, providing a cost-effective route for companies to provide decision-useful, assurable financial information to investors.”
Click here to access the new guide.