The agenda items for discussion include:

• Technical assessment of IFRS S1 and IFRS S2
  • Assessment approach
  • Work plan for technical assessment of IFRS S1 and IFRS S2
  • Project plan and target timeline

The meeting agenda and papers and details of how to register are available on the Financial Reporting Council (FRC) website.

The FCA, when monitoring compliance with Disclosure Guidance and Transparency Rule (DTR) 6.3 noted instances of:

• Annual financial reports that have been made public via a regulatory announcement, but the report has not been filed on the National Storage Mechanism (NSM). 
• Announcements of annual financial reports that do not contain a statement to indicate that the full report is available on the NSM as required under DTR 6.3.5R(1A)(1)(c).
• Announcements that do not contain a statement indicating the website on which the report is available as required under DTR 6.3.5R(3)(a).

The FCA reminds companies that including links in an announcement to other hosting sites such as the London Stock Exchange’s website to provide access to a pdf of the report without also uploading it to the NSM does not meet the filing requirement in DTR 6.2.10R.

With respect to structured digital reporting, the FCA has identified low compliance rates with preparation and filing that meets the disclosure requirement for annual financial reports.  Examples include:

• Annual financial reports that contain consolidated financial statements that have not been correctly tagged in accordance with DTR 4.1.18R.
• Annual financial reports that have been filed on the NSM in accordance with DTR 6.2.10R but not in XHTML format as required by DTR 4.1.15R.

The FCA reminds companies that it will continue to closely monitor compliance with annual financial reporting obligations and take supervisory action in respect of non-compliance as appropriate.  In order to improve their structured digital reporting, the FCA suggests that companies review the Financial Reporting Lab's December 2023 report on this area.

The Bulletin also highlights a proposed change to ethnicity categories to align with revisions made by the Office of National Statistics (ONS) for those companies in scope of the FCA's diversity disclosure requirements (either through LR LR 9.8.6R(9) or LR 14.3.33R(1)).  It is proposed that the 'other ethinic group' category in the board diversity rules be updated to align with the ONS 'Other ethnic group' category description.  The FCA indicates that any potential change will be made in the summer alongside wider Listing Rule changes.

The Primary Market Bulletin is available on the FCA website.

The IFRS Advisory Council provides a forum for the IASB and the ISSB to consult a wide range of interested parties affected by their work, with the objective of advising the boards on agenda decisions and priorities in their work, informing the boards of the views of the organisations and individuals on the council on major standard-setting projects, and giving other advice to the boards or to the Trustees.

For more information, please see the press releases on the IFRS Foundation website:

• Advisory Council members
• Advisory Council Chair

The meeting is intended to keep the DPOC informed of the ISSB's agenda consultation process, including how the ISSB expects to respond to the input it has received. It also provides DPOC members with an opportunity to ask questions and provide comments before publication of the feedback statement towards the end of June 2024.

The agenda paper for the meeting is available on the IFRS Foundation website.

Mr Barckow began his speech by noting that in today’s financial reporting world, ‘connectivity’ was the new hot topic and one that seemed to have appeared from nowhere in the last couple of years. He acknowledged, however, that the heightened emphasis on ‘connectivity’ likely stemmed from a fundamental shift in how the purpose and context of financial reporting itself is viewed.

And he admitted, that while financial statements continue to have their place in the corporate reporting world and the information provided is considered relevant and reliable, there are limitations of the financial statements, namely that financial statements are not meant to report on the future or to demonstrate impacts or dependencies. However, he noted:

The boundaries of the financial statements are there for a purpose. Of course, that does not mean that the purpose cannot be changed — as said: financial reporting is a set of conventions. The question is, however, whether the conventions need to be changed, or whether the purpose of financial reporting would not be better served by linking the information contained in the financial statements to information provided through other sets of reporting.

Mr Barckow then explained that by creating the ISSB as a sister board to the IASB, i.e. making the ISSB subject to the same rigorous due process that governs the work of the IASB, an expectation has been created that investor-focused sustainability disclosures can be brought to the same high level of quality, rigidity and robustness that people associate with financial reporting. So would it then really be that surprising that stakeholders ask how the information produced by applying IFRS Accounting Standards connects to information that is produced by applying IFRS Sustainability Standards? 

In the end, he noted, we need to accept that traditional accounting and reporting dealing with issues that are largely outside the boundaries of the financial statements, both subject-matter and timing-wise, complement each other and are needed to convey a complete, consistent and coherent story about the entity’s existing financial position and performance, its strategy and governance, the risks and opportunities it is facing and how it is managing them.

He concluded his speech by noting that connectivity should not be viewed as a one-way street: entities that report under the standards of the ISSB are actually required by IFRS S1 to connect information in the report that houses the sustainability-related financial disclosures to information in the financial statements. And, he added, "we should start thinking about providing for a similar kind of linkage the other way around, where this is both feasible and appropriate". 

Please click to access a transcript of Mr Barckow's full speech on the IFRS Foundation website.

This follows a Memorandum of Understanding (MoU) between the IFRS Foundation and GRI that was signed in March 2022. The MoU stated that the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB) will seek to coordinate their work programmes and standard-setting activities.

As part of the deepened relationship, the ISSB and the GSSB have committed to jointly identify and align common disclosures that address information needs under the scopes and purposes of both sets of standards.  An initial outcome of the collaboration will involve a methodology pilot building on GRI 101: Biodiversity 2024, published in January 2024, and the ISSB’s upcoming project on biodiversity, ecosystems and ecosystem services.

The ISSB and the GSSB will continue to make decisions separately in accordance with their established standard-setting due processes, including public consultation in respect of any proposed amendments to their respective standards.

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

The proposed changes include:

• line-item modelling for conveying category information (such as, operating, investing, financing) for the statement of profit or loss; and
• dimensional modelling for tagging disclosures on management-defined performance measures and specified expenses by nature, as these link to information in the statement of profit or loss.

The press release on the IFRS Foundation website offers access to the proposed update and an explanatory video overview. It also contains details on a fieldwork exercise the IASB is planning to conduct during the consultation period. Comments are requested by 3 September 2024.

Note: On 3 June 2024, the IASB released a video explaining about the importance of the fieldwork exercise.

The statement calls for commitment from relevant authorities across jurisdictions to adopt IFRS S1 and IFRS S2 on an economy-wide basis by 2025. In the signatories' view, ensuring that disclosure frameworks use or incorporate the ISSB standards is a natural next step to build on existing progress and prompt entities to report material information on climate and other sustainability-related risks and opportunities.

The signatories expect that this will bring significant benefits to economies. Providing consistent sustainability information will help entities attract international capital, as the financial sector increasingly integrates sustainability into investment and financing strategies. For the many entities that operate across multiple jurisdictions, having consistent disclosure standards internationally will reduce their overall reporting burden.

Please click to access the statement on the PRI website.

The following topics were discussed:

SASB standards maintenance: The ISSB decided to continue to group entities into industries based on shared sustainability-related risks and opportunities that could reasonably be expected to affect an entity’s prospects, as represented by the Sustainable Industry Classification System, for the ISSB’s next two-year work plan. The ISSB also decided to consider enhancing the industry groupings when it enhances the SASB standards.

ISSB consultation on agenda priorities: ISSB members reviewed a summary of all decisions made during the agenda consultation and the resulting two-year work plan commencing June 2024. No decisions were made.

Supporting the implementation of IFRS S1 and IFRS S2: The ISSB were given the opportunity to make comments or ask questions on the summary of the March 2024 TIG meeting. No decisions were made.

Please click to access the detailed notes taken by Deloitte observers for the entire meeting.

The webcasts are hosted by ISSB Vice-Chair Sue Lloyd and ISSB staff member Gabriel Benedict.

The first webcast provides an overview of the overarching requirements and focuses on requirements related to disclosing information about the financial effects in the current reporting period.

The second webcast focuses on the requirements related to disclosing information about the financial effects over the short, medium and long term—including the judgement needed for such disclosures—and requirements in the ISSB standards that support application, including proportionality mechanisms.

Please click to access the webcasts via the press release on the IFRS Foundation website.