HM Treasury has set out a three-year phased approach to implement the TCFD recommendations in central government annual reports and accounts.  In July 2023 it published its phase 1 guidance which addressed the recommended disclosures for the governance pillar applying to in-scope central government bodies' annual reports and accounts from 2023-24.

The exposure draft for Phase 2 sets out the disclosure requirements in the second year of disclosure and covers the risk management and metrics and targets pillars of the TCFD framework.  Phase 2 requirements will apply to reporting periods from 2024-25 (proposed effective date 1 April 2024) and expand upon the existing reporting requirements in Phase 1.  

The guidance will apply to all departments (ministerial and non-ministerial), as well as some central government and wider public sector bodies that meet certain criteria, or where they have been directed/instructed to follow the guidance by their respective relevant authority. Other central government and public sector bodies may voluntarily choose to follow the guidance in full or in part. 

Application guidance for Phase 3 will be issued in due course. 

Comments on the exposure draft are requested by 26 February 2024.  

A press release and the exposure draft are available on HM Treasury website.

Update 21 March 2024 - the application guidance for Phase 2 was published.  For more information see the HM Treasury website.

Update 24 April 2024 - a summary of responses to the consultation and specific changes to the application guidance was published on the HM Treasury website.

The IPTF's discussion document for the 9 November 2023 meeting is now available and states the following view of the Task Force:

Countries with three-year cumulative inflation rates exceeding 100%:

• Argentina
• Ethiopia
• Ghana
• Iran
• Lebanon
• Sierra Leone
• Sudan
• Suriname
• Turkey
• Venezuela
• Yemen
• Zimbabwe

Countries with projected three-year cumulative inflation rates exceeding 100%:

• Haiti

Countries where the three-year cumulative inflation rates had exceeded 100% in recent years:

• South Sudan

Countries with recent three-year cumulative inflation rates exceeding 100% after a spike in inflation in a discrete period:

There are no countries in this category for this period.

Countries with projected three-year cumulative inflation rates between 70% and 100% or with a significant (25% or more) increase in inflation during the current period

• Angola
• Burundi
• Egypt
• Lao P.D.R
• Malawi
• Moldova
• Nigeria (new entry)
• Pakistan
• Sao Tome and Principe
• Sri Lanka
• Ukraine

The IPTF also notes that there may be additional countries with three-year cumulative inflation rates exceeding 100% or that should be monitored which are not included in the analysis as the necessary data is not available. Examples cited are Eritrea, Syria, and Afghanistan.

The full list, including exact numbers, detailed explanations of the calculation of the numbers, and observations of the Task Force is available on the CAQ website.

The IASB issued IFRS 6 Exploration for and Evaluation of Mineral Resources in December 2004 as a result of a project taken over from the IASC. The standard was meant to be an interim step in the accounting for extractive activities.

In April 2010, the IASB published a discussion paper prepared by a project team of national standard-setters from Australia, Canada, Norway and South Africa and subsequently analysed the feedback. In December 2012, the IASB deactivated the project, but in 2019 reactivated to project to see whether changes to IFRSs and other documents, and other developments since the discussion paper was published had affected the issues and conclusions in the discussion paper. 

Based on evidence collected since reactivating the project, the IASB concluded at its September 2023 meeting that there is no compelling evidence that standard-setting would be necessary. While there is diversity in practice regarding the accounting for extractive activities, feedback from investors and other users of financial statements suggested that those diverse accounting policies were not a significant concern.

The project summary published today, therefore, concludes the project. Please see the press release and the project summary on the IFRS Foundation website.

This second webcast discusses the benefits and impact of the forthcoming new accounting standard from a regulatory perspective.

Please click to access all webcasts in the series so far on the IFRS Foundation website.

• Part one gives an overview of the new standard (9 minutes)
  
• Part two discusses the standard from a regulatory perspective (8 minutes)

The podcast high­lights projects which were discussed during the meeting in depth:

• IASB work plan.
• Management commentary.
• Power purchase agreements
• Preview of key developments from the IASB during the first half of 2024.

The podcast can be accessed here on the IFRS Foun­da­tion website.

An analysis of changes to the work plan resulting from the IASB dis­cus­sions can be found here.

The analysis, Building Trust in Sustainability Reporting: The Urgent Need for Integrated Internal Control, highlights the increasing expectations of investors for high quality and reliable sustainability-related information driven by a number of new standards and requirements for mandatory sustainability-related disclosures.  Investors expect companies to produce reliable and connected financial and sustainability reporting and sustainability-related disclosures in order to allow them to make informed economic decisions based upon the information provided.

The analysis indicates that an integrated internal control environment for financial and sustainability reporting will enable companies to meet these investor demands and in turn will lead to increased confidence in the quality of sustainability information through integration into the mainstream reporting process.  IFAC comments:

Through an integrated control environment based on an integrated mindset, companies will achieve greater connectivity of functions, processes and systems leading to enhanced data quality to improve decision making on strategy, risk, opportunity management and governance-related matters.  This is the foundation for transitioning to a more sustainable business model and enhancing investor and stakeholder confidence in sustainability performance.

The analysis explains that an integrated internal control environment establishes robust data collection, processes and controls through:

• Effective governance
• Risk and materiality assessments
• Sustainability reporting policy and process development
• Robust data management and reporting systems
• Continuous improvement framework

The analysis provides guidance on how entities might go about addressing the challenges associated with collecting, processing and analysing sustainability information in the design of the internal control environment and also the role that the finance function and professional accountants will play.

The press release and the analysis are available on the IFAC website.

The press release states that the ISO 14000 environmental management and greenhouse gas emission standards can assist entities to implement their sustainability and climate commitments. They can also support entities to develop disclosures that are in line with IFRS S2 ‘Climate-related Disclosures’.

The press release also notes that the ISO supports the work of the International Sustainability Standards Board (ISSB) to establish a truly global baseline of sustainability-related financial disclosures. This is because ISO Standards support consistent approaches internationally in the internal management of sustainability-related matters.

In addition, the ISO and the IFRS Foundation are committed to advancing capacity building initiatives that focus on supporting organisations to build internal expertise and understanding that advance practices and reporting.

For more information please click the press release on the IFRS Foundation website.

Both IFRS Foundation and third-party educational material is available in the hub, with the latter comprising more than 100 resources developed by third-party organisations. Additional content will be included over time in response to market needs and emerging practices. Resources already available in the hub include an introduction to IFRS S1 and IFRS S2, a guide for transitioning from TCFD recommendations to the new standards, and a set of Frequently Asked Questions (FAQs).

While the hub has been designed to help companies preparing their IFRS S1 and IFRS S2 disclosures, it will also be a repository for auditors, investors, regulators and other stakeholders seeking to advance their understanding of the new standards.

The IFRS Foundation is focused on supporting the implementation of the standards through capacity building initiatives and is working with a number of partners to advance this work, such as the UN Sustainable Stock Exchange Initiative, the Association of Chartered Certified Accountants (ACCA), the Pan African Federation of Accountants (PAFA), the United Nations Development Programme (UNDP) and the International Federation of Accountants (IFAC).

Please click for:

• Press release on the IFRS Foundation website
• Access to the IFRS Sustainability Knowledge Hub on the IFRS Foundation website

The educational material has been developed to help entities apply IFRS S2 and includes three examples that help illustrate how entities might approach nature and social aspects of their climate-related disclosures. The material does not affect any of the requirements within the standards. 

The publication follows the launch of the IFRS sustainability knowledge hub, which the press release describes as a core component of the IFRS Foundation’s focus on capacity building initiatives. 

Please click to access the educational material on the IFRS Foundation website. 

In addition, the Trustees have launched a call for new Committee members.

For more in­for­ma­tion, see the press release on the IFRS Foundation’s website.