Global capital markets demand better information about sustainability-related matters to enable investors to factor in sustainability-related risks and opportunities in their assessment of enterprise value. To meet this demand, the International Sustainability Standards Board (ISSB) was created in November 2021 as a new standard-setting board within the IFRS Foundation.
The ISSB’s remit is to issue standards that deliver a comprehensive global baseline of sustainability-related financial disclosures for capital markets. It will operate alongside the International Accounting Standards Board. The ISSB’s standards will be called IFRS Sustainability Disclosure Standards.
In March 2022, the International Sustainability Standards Board published its first two exposure drafts of IFRS Sustainability Disclosure Standards:
- IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
- IFRS S2 Climate-related Disclosures
The proposals set out requirements for the disclosure of material information about a company’s significant sustainability-related risks and opportunities that investors need for assessing a company’s enterprise value.
The ISSB is seeking feedback on the proposals over a 120-day consultation period closing on 29 July 2022. It will review feedback on the proposals in the second half of 2022 and aim to issue the new Standards by the end of the year after reviewing the feedback.
For an overview of both of these exposure drafts, read the Exposure Draft—Snapshot.