The TIG informs the ISSB about potential implementation questions that could arise when companies implement the new standards IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.

The purpose of the TIG is to solicit, analyse and discuss stakeholder questions arising from implementation of the new standards, to inform the ISSB about those implementation questions, which will help the ISSB determine what, if any, action will be needed to address those questions, and to provide a public forum for stakeholders to learn about the new Standards from others involved with implementation.

Review the list of members on the IFRS Foundation website

She discussed the following five aspects:

• The need for global sustainability disclosures: The International Sustainability Standards Board (ISSB) Standards are being developed to enhance investor-company dialogue through by consolidating and inheriting the resources of other investor-focused initiatives in order to reduce fragmentation.
• Overview of IFRS S1 and IFRS S2: Ms. Lloyd gave an overview of the first two ISSB standards, IFRS S1, the general requirements standard, that provides a set of overarching disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term, and IFRS S2 that sets out specific climate-related disclosures and is designed to be used with IFRS S1.
• Support for the ISSB standards: Ms. Lloyd noted the strong support from the investor community internationally for the consistency and comparability of information the ISSB standards will provide for, the announcement from the Financial Stability Board that as a result of the ISSB standards the work of the Task Force on Climate-related Financial Disclosures (TCFD) is complete, and endorsement of the standards by the International Organization of Securities Commissions (IOSCO).
• Cooperation with the European Union: The ISSB welcomes the commitment from the European Commission and European Financial Reporting Advisory Group (EFRAG) to support the need for international consistency. The ISSB's work with European Commission and EFRAG is now focused on how to jointly illustrate the interoperability between the standards.
• Next steps for the ISSB: The ISSB will analyze closely the views of the key stakeholders on the next two-year agenda for the ISSB. Stakeholders have been asked to comment on the strategic direction and balance of the ISSB’s activities; the criteria for assessing which sustainability-related matters to prioritize; and the scope and structure of potential new research and standard-setting projects.

Access the speech on the IFRS website.

• Amplified Engagement through Stakeholder Survey: Recognizing the diverse perspectives and levels of expertise within the stakeholder community, an alternative avenue for feedback has been developed. In addition to the comprehensive Explanatory Memorandum and Response Template, the IAASB has created a stakeholder survey. This user-friendly tool allows the IAASB to obtain the views of stakeholders who may not ordinarily respond to IAASB consultations, including preparers of sustainability information, those with the oversight of its preparation, investors and other users of the sustainability information, sustainability reporting standard setters and members of the academic community. Survey responses will be aggregated and analyzed in conjunction with other feedback received.
• Webinars for Enhanced Understanding: Learn more about ISSA 5000 at dedicated IAASB webinars for practitioners and regulators.
• Empowering Global Exchange at Notable Events: Events leading to opportunities for learning, sharing, and networking.

Re­view the webinar schedule on IAASB’s website.

IFAC calls on G20 leaders to:

• Make Sustainability A Reality, Not Just a Goal
• Support Public Financial Management and Fight Corruption
• Create an Environment for SME Growth and Innovation
• No Inclusive Growth without Education

Review the call to action on the IFAC website.

Highlights of the podcast include discussions on:

• Progress since the launch of IFRS S1 and IFRS S2;
• Technical updates;
• Upcoming IAASB consultation;
• Information on recent webinars.

Access the podcast on the IFRS website.

IOSCO has engaged extensively with the ISSB over the last two years during the development of IFRS S1 and IFRS S2, culminating in a comprehensive and independent review of the final standards. After a detailed analysis, IOSCO has determined that the ISSB standards are appropriate to serve as a global framework for capital markets to develop the use of sustainability-related financial information in both capital raising and trading and for the purpose of helping globally integrated financial markets accurately assess relevant sustainability risks and opportunities.

The International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) applaud the efforts of the International Sustainability Standards Board (ISSB) and today’s International Organization of Securities Commissions (IOSCO) endorsement decision of the ISSB’s recently issued IFRS Sustainability Disclosure Standards S1 and S2. IOSCO determined that these standards are “appropriate to serve as a global framework for capital markets to develop the use of sustainability-related financial information in both capital raising and trading and for the purpose of helping globally integrated financial markets accurately assess relevant sustainability risks and opportunities.”

Review the press release and high level roadmap on the IOSCO and IFRS website respectively.

Refer to the joint statement from the IAASB and IESBA Chairs on IOSCO’s endorsement of the IFRS Sustainability Disclosure Standards.

The CSA commended the ISSB for developing a global framework for investor-focused disclosure that is responsive to market demand for more consistent and comparable disclosures. The CSA is also encouraged by the ISSB’s proposed capacity building efforts to support adoption of the ISSB Standards.

Re­view the news release on CSA's website.

The ISSB was established in November 2021 to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. In March 2022, the ISSB launched a consultation on its first draft IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2). After a consultation period of 120 days, the ISSB redeliberated the proposals in the draft standards and decided to finalize the proposals.

Key requirements

The main requirements in IFRS S1 broadly reflect the proposals in ED/2022/S1 General Requirements for Disclosure of Sustainability-Related Financial Information with changes introduced in the following areas:

• The concept of “enterprise value”
• The breadth of the reporting required
• The use of the term “significant” for sustainability-related risks or opportunities
• Identifying material sustainability-related risks and opportunities and information to disclose (including using the work of other standard-setters)
• Application of the materiality assessment
• Connected information
• Frequency (or timing) of reporting
• Comparative information and updated estimates
• Proportionality of the requirements
• Current and anticipated financial effects of sustainability-related and climate-related risks and opportunities on an entity’s financial performance, financial position and cash flows

Effective date and transition

An entity is required to apply IFRS S1 for annual reporting periods beginning on or after January 1, 2024. Earlier application is permitted. If an entity applies IFRS S1 earlier, it is required to disclose that fact and apply IFRS S2 at the same time.

The following transitional reliefs are available:

• Comparative information: An entity is not required to disclose comparative information in the first annual reporting period in which it applies IFRS S1.
• Timing of reporting: In the first annual reporting period in which an entity applies IFRS S1, the entity is permitted to report its sustainability-related financial disclosures after it publishes its related financial statements (as specified in IFRS S1).
• Information on sustainability-related risks and opportunities other than climate: In the first annual reporting period in which an entity applies IFRS S1, the entity is permitted to disclose information on only climate-related risks and opportunities (in accordance with IFRS S2) and consequently apply the requirements in IFRS S1 only insofar as they relate to the disclosure of climate-related financial information.

Additional information

The following additional information is available on the IFRS Foundation website and on Canada Centre for Financial Reporting (CFR):

• ISSB press release
• Basis for conclusions on S1
• Effects analysis on IFRS S1 and IFRS S2
• Project summary of IFRS S1 and IFRS S2
• Feedback statement for IFRS S1 and IFRS S2
• Our CFR summary of IFRS S1
• Our CFR project page on General requirements

The ISSB was established in November 2021 to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. In March 2022, the ISSB launched a consultation on its first draft IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2). After a consultation period of 120 days, the ISSB redeliberated the proposals in the draft Standards and decided to finalize the proposals.

Key requirements

The main requirements in IFRS S2 broadly reflect the proposals in ED/2022/S2 "Climate-related Disclosures" with changes introduced in the following areas:

• Strategy and decision-making, including transition planning
• Climate resilience
• Greenhouse gas emissions
• Industry-based requirements
• Proportionality of the requirements
• Current and anticipated financial effects of sustainability-related and climate-related risks and opportunities on an entity’s financial performance, financial position and cash flows

Effective date and transition

An entity is required to apply IFRS S2 for annual reporting periods beginning on or after January 1, 2024. Earlier application is permitted. If an entity applies IFRS S2 earlier, it is required to disclose that fact and apply IFRS S1 at the same time.

The following transitional provisions are available:

• Comparative information: An entity is not required to disclose comparative information in the first annual reporting period in which it applies IFRS S2.
• Greenhouse Gas Protocol: If, in the annual reporting period immediately preceding the date of initial application, the entity used a method for measuring its greenhouse gas emissions other than the ‘Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004)’, the entity is permitted to continue using that other method in the first annual reporting period in which the entity applies IFRS S2.
• Scope 3 greenhouse gas emissions: In the first annual reporting period in which an entity applies IFRS S2, the entity is not required to disclose its Scope 3 greenhouse gas emissions which includes, if the entity participates in asset management, commercial banking or insurance activities, the additional information about its financed emissions.

Additional information

The following additional information is available on the IFRS Foundation website and on Canada Centre for Financial Reporting (CFR):

• ISSB press release
• Basis for conclusions on S1
• Effects analysis on IFRS S1 and IFRS S2
• Project summary of IFRS S1 and IFRS S2
• Feedback statement for IFRS S1 and IFRS S2
• Our CFR summary of IFRS S2
• Our CFR project page on Climate-related disclosures

Access the podcast on the IFRS website.