In its final comment letter EFRAG expresses its appreciation for the IASB’s swift response and delivery of the exposure draft.  EFRAG welcomes and supports the IASB's proposal as it will allow insurance entities to provide more useful information about their activities during the comparative period and also reduce operational challenges.  EFRAG also commends the IASB for addressing most of the comments raised by European constituents in this area.

Overall, EFRAG agrees with the IASB proposals in the exposure draft but does flag some remaining concerns that it would like the IASB to address when finalising the amendment.  For example, ​EFRAG recommends that the IASB aligns the scope of the classification overlay and the temporary exemption from applying IFRS 9 (which is under IFRS 4 Insurance Contracts) due to operational complexity and presentation inconsistencies in the consolidated financial statements.

Also, EFRAG suggests that the IASB states explicitly that the classification overlay may be applied from a date pre-dating the publication of the ED or the final amendment. 

The press release and the final comment letter are available on the EFRAG website. 

The TRWG provides technical observations and proposals for consideration which supports early standard-setting activities for the International Sustainability Standards Board. For more information, see the press release on the IASB’s website.

The letter includes thematic findings on IFRS 9 expected credit loss accounting (ECL) and thematic findings relating to the global benchmark reform.  It also sets out how the PRA intends to use next year’s round of written auditor reporting to explore risks related to climate change.

The full letter is available on the PRA website.

The report discusses ‘the state of play and the drivers of current reporting practices, the application of technological solutions, and suggests a path to improvement in the reporting of sustainability risks, opportunities and their linkage to the business model’. The supplementary document provides selected examples of good or leading reporting practices by companies related to improvements to reporting sustainability risks, and opportunities.

For more information, see the press release on the EFRAG website. The report will be introduced in a webinar on 3 November 2021. Please click for more information here.

In addition, the EFRAG will introduce a series of three podcast on the report:

1. Key findings of the report.
2. Insights on the good reporting practices identified in the report.
3. Highlights the current and potential role of technology in sustainability reporting.

Update 7 December - a summary report and the recording from the webinar are available on the EFRAG website.

At the outreach event, the IASB will present its proposals and participants will have the opportunity to provide their views on the ED.

More information, including how to attend the outreach event can be found on the FRC website.

The update reports on the EFRAG Board webcast meeting on 7 September, the EFRAG TEG webcast meetings on 7 September, 15-16 September and 28 September and the EFRAG TEG and EFRAG CFSS webcast meeting on 15 September. The update also covers the activities of the European Reporting Lab as well as webinars and online outreaches.

The update also lists EFRAG publications issued in September including:

• EFRAG's final comment letter and feedback statement on the IASB's Exposure Draft ED/2021/1 Regulatory Assets and Regulatory Liabilities.
• EFRAG's final comment letter on the IASB’s Exposure Draft ED/2021/4 Lack of Exchangeability.
• EFRAG's draft comment letter on the IASB's Exposure Draft ED/2021/7 Subsidiaries without Public Accountability: Disclosures.

Please click to download the September EFRAG Update from the EFRAG website.

Investors and other stakeholders are increasingly interested in disclosures on the environmental and social impact of companies’ activities and their governance arrangements. This project will look at the production, distribution and consumption of ESG data. The first phase of the project will focus on the production of ESG data.

The scope of this first project phase will be determined in conjunction with participants but is expected to cover:

• what ESG data companies collect;
• what methodologies companies use to measure ESG data;
• what systems they use to collect and produce the data;
• how they get comfort on the accuracy of the data; and
• how they transform the data into useful external disclosure.

Interested parties are invited to communicate their interest by 15 November 2021.

Further information including the press release and the Call for Participants is available on the FRC website.

The May 2020 Amendments comprise three Annual Improvement amendments (from the IASB’s Annual Improvements to IFRS Standards 2018–2020) and three Narrow-Scope amendments.

The Annual Improvement amendments covered in the draft endorsement assessment criteria assessment are:

• Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards—Subsidiary as a First-time Adopter.
• Amendments to IFRS 9 Financial Instruments—Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities.
• Amendments to IAS 41 Agriculture—Taxation in Fair Value Measurements.

The Narrow-Scope Amendments covered in the draft endorsement assessment criteria are:

• Amendments to IAS 16 Property, Plant and Equipment—Proceeds before Intended Use
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets—Onerous Contracts—Cost of Fulfilling a Contract.
• Amendments to IFRS 3 Business Combinations—Reference to the Conceptual Framework.

The UKEB secretariat's initial assessment concludes that:

• the May 2020 Amendments meet the criteria of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c)); and
• application of the May 2020 Amendments is not contrary to the principle that an entity’s accounts/consolidated accounts must give a true and fair view, as required by SI 2019/685 (see Regulation 7(1)(a)).

Additionally the UKEB secretariat initially concludes that the May Amendments will improve the quality of financial reporting and that the benefits of the May 2020 Amendments are likely to outweigh the costs.

Comments on the draft UK Endorsement Criteria Assessment are requested by 30 November 2021.

The draft UK Endorsement Criteria Assessment and the Invitation to Comment can be accessed on the UKEB website.

The meeting saw presentations on the following topics:

• Q&A on sustainability reporting
• Welcome address by the new IASB Chair
• How has the pandemic changed engagement with the IFRS Foundation?
• The future of the IASB work plan — Agenda consultation: what’s next?
• Q&A on IASB and IFRS IC activities
• Towards a revised Management commentary Practice Statement

In addition, WSS participants received pre-conference video updates on certain topics that can also be watched now.

The recordings can be accessed through the conference site on the IASB website. You will need to sign in, however, the free-of-charge basic registration suffices to watch the recordings.

These Regulations, which were consulted on in February 2021, have been introduced to improve the quality of governance and reporting with respect to climate change risks and opportunities for Occupational pension schemes. 

The Climate Change Governance and Reporting Regulations will require, from 1 October 2021, the trustees of schemes in scope to:

• implement climate change governance measures and produce a Task Force on Climate-related Financial Disclosures (TCFD) report containing associated disclosures; and
• publish their TCFD report on a publicly available website, accessible free of charge.

Changes made by the Miscellaneous Provisions Regulations will require trustees who must produce a TCFD report to, among other things:

• include a link to the TCFD report in the Annual Report
• tell members that the TCFD report has been published and where they can locate it, by including this information in the Annual Benefit Statement and, for defined benefit (DB) schemes, the Annual Funding Statement.

The Department for Work and Pension's (DWP's) has published statutory guidance which Trustees of occupational pension schemes must have regard to when meeting requirements under the new regulations.  The guidance is split into four parts covering:

• Background
• An overview of climate change governance requirements
• Climate change governance and production of a TCFD report
• Publication of a TCFD report

Additionally trustees should refer to the non-statutory guidance issued by the Pensions Climate Risk Industry Group (PCRIG). This is non-mandatory guidance but might be helpful for trustees to consider in addition to the statutory guidance which must be followed.

Click for:

• The Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 (link to regs).
• The Occupational Pension Schemes (Climate Change Governance and Reporting) (Miscellaneous Provisions and Amendments) Regulations 2021 (link to regs).
• DWP statutory guidance (link to DWP website)
• Non-statutory PCRIG guidance (link to DWP website)