The ISSB Standards are here!
The International Sustainability Standards Board (‘ISSB’) has published its first two finalised standards:
- IFRS S1: Disclosing sustainability-related risks and opportunities
- FRS S2: Disclosing climate-related risks and opportunities
In the Law:
The ISSB standards establish a global baseline for sustainability-related financial language. In Australia, Treasury has indicated that mandatory climate-related disclosures for large-listed companies and financial institutions will likely follow the ISSB Standards, and the Australian Accounting Standards Board (‘AASB’) is likely to develop closely aligned sustainability standards for the Australian market.
In the Company Boardroom:
Companies now have a standardised approach to ESG reporting. S1 and S2 standards will be effective from January 2024. The ISSB S2 has granted companies an additional year to include Scope 3 carbon emissions data, also providing further support and guidance for measuring Scope 3 emissions – a challenging task in understanding their overall carbon footprint.
In the Investment Houses:
ISSB has been positively received by investors. As companies adopt the ISSB Standards, investors will gain access to directly comparable data points across companies and industries globally, enhancing their understanding of company performance and commitment to sustainability initiatives.
Our View:
Finally! We have been eagerly awaiting the release of the ISSB Standards. Once ISSB is rolled out, the standards will increase the transparency of our companies on their sustainability progress. This transparency leads to increased trust of customers, investors, and regulators.
An easy first step for companies to begin aligning their disclosures with ISSB is to undertake a gap analysis of current reporting vs. the S1 / S2. For additional information, contact us today at info@anabranchesg.com.au
