ISSB publishes draft methodology for improving the international applicability of the SASB standards

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11 May, 2023

The International Sustainability Standards Board (ISSB) has published today an exposure draft 'Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates'. The deadline for submitting comments is 9 August 2023.

 

Background

The International Sustainability Standards Board (ISSB) inherited and is now responsible for the maintenance and enhancement of the standards developed by the the Sustainability Accounting Standards Board (SASB).

A small subset of the SASB standards incorporates references to specific jurisdictional laws and regulations that may be globally inapplicable, introduce regional bias, increase application costs and decrease the comparability and decision-usefulness of the resulting disclosures. Therefore, the ISSB is working towards developing a methodology to enhance the content in the SASB standards in order to make the SASB standards more internationally applicable and GAAP-agnostic, without altering the intent or underlying concepts of any specific disclosure topic or metric.

 

Proposed methodology

The ISSB invites comments on the proposals in exposure draft ED/ISSB/2023/1 Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates.

Scope The proposed scope for application of the methodology described in the exposure draft includes all SASB standards not amended when IFRS S2 Climate-related Disclosures will be published (non-climate-related SASB standards).
Objective The objective of the methodology proposed in the exposure draft is to enhance the international applicability of the SASB Standards without substantially changing the structure or original intent of the content. The proposed methodology is also designed to ensure amendments preserve the decision-usefulness of the SASB Standards for users of general purpose financial reports and not increase the costs of application for preparers.
Revision approaches
In descending order of preference, amendments to the non-climate-related SASB standards would be made by the following revision approaches:
  • Approach 1 — Substitute available internationally applicable references for standards, definitions or calculation methods to replace jurisdiction-specific references;
  • Approach 2 — Provide more generalised definitions for standards, definitions or calculation processes to replace jurisdiction-specific references;
  • Approach 3 — Adopt generalised jurisdictional references to enable preparers to use applicable jurisdictional laws, regulations, methodologies or guidance to replace jurisdiction-specific references;
  • Approach 4 — Remove disclosure metrics that are ill-adapted for international application or have no identified international equivalents outside specific jurisdictions; and
  • Approach 5 — Remove and replace jurisdiction-specific metrics when a relevant replacement can be identified to preserve the disclosure topic’s integrity, aligning with the intent of the original metric as much as possible based on research, to meet the needs of users of general purpose financial reports.
SASB standards taxonomy updates In order to reflect the proposed methodology to improve the international applicability of the SASB standards, the SASB standards taxonomy is proposed to be amended to change, remove, or add taxonomy concepts to align with proposed amendments to the SASB standards.

    The exposure draft notes that it focuses specifically on a first phase of narrow-scope work to amend the SASB standards in accordance with the proposed methodology to improve their international applicability. In subsequent phases, the ISSB will consider further enhancements to the SASB standards to improve their decision-usefulness, balance their cost-effectiveness for preparers, and ensure their international relevance.

    Comments on the exposure draft are requested by 9 August 2023.

     

    Additional information

    The following additional information is available on the IFRS Foundation website and on IAS Plus:

     

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