Tax & AccountingMay 19, 2022

ISSB announces outline of actions to deliver global baseline of sustainability disclosures

By: CCH ARM Editorial

The IFRS Foundation’s International Sustainability Standards Board (ISSB) has outlined the necessary steps required to establish a comprehensive global baseline of sustainability disclosures. It intends this global baseline to reduce the existing and further fragmentation of sustainability disclosure requirements and expects that widespread use of the baseline will reduce the costs for data preparers and improve information usability for data users. 

The ISSB believes that the necessary institutional and technical standard-setting work to establish the core elements of the global baseline will be completed by the end of 2022, subject to feedback received from its ongoing consultation.

Implementing the global baseline

  • International collaboration, which the ISSB views as essential to create a disclosure system that can be implemented globally, resulting in a consistent approach across markets; 
  • A dedicated inclusive working group will permit the ISSB to work in close cooperation with jurisdictions that are consulting, or plan to consult, on their capital market requirements for sustainability disclosures. This will require special focus on the needs of emerging and developing economies, as well as smaller- and medium-sized companies and others within global supply chains, given the additional challenges faced by such companies in applying sustainability disclosure requirements; 
  • Intensified engagement with jurisdictional authorities and market participants, needed to facilitate participation in the ISSB’s standard-setting, consistent with the requests by the G7 and G20; and
  • Establishment of the necessary advisory and consultative bodies that will serve as a platform for enhanced collaboration with other international organizations, jurisdictional authorities, and representatives of other stakeholders. 

The global baseline builds upon, incorporates, and protects the heritage of the existing investor-focused sustainability disclosure standards, including those of the Task Force on Climate-related Financial Disclosures (TCFD), the Climate Disclosure Standards Board (CDSB), SASB Standards, Integrated Reporting and the World Economic Forum’s metrics. 

Progress on implementing the plan 

The ISSB announcement also notes the progress already made towards establishing the global baseline, including staffing the ISSB, announcing primary locations in Frankfurt and Montreal, consolidating the work of the CDSB into the IFRS Foundation, working to consolidate the Value Reporting Foundation, and entering into a cooperation agreement with the Global Reporting Initiative (GRI). In addition, the ISSB has issued its first two proposed standards, a draft climate standard and a general requirements standard, which include industry-based requirements.

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