Developing educational material on materiality (Agenda Paper 9)

This paper’s objective was to present the focus areas for educational material that the ISSB staff is developing. The educational material should explain the application of the concept of materiality in the context of the requirements in IFRS Sustainability Disclosure Standards, and the scope of information to which the concept of materiality is applied. This educational material does not amend the requirements in IFRS S1 or IFRS S2.

Whilst an ISSB meeting is not required for the development of educational material, the staff believe it is important to seek ISSB members’ feedback on the materials presented. The discussion was intended to inform the ongoing work to develop educational material on materiality. The slides included in the agenda paper represent the areas that the staff believe are important to cover in the context of the requirements in IFRS Sustainability Disclosure Standards. The focus areas for the discussion were:

• Using ISSB standards to prepare sustainability-related financial disclosures
• Definition of material information
• Sustainability-related risks and opportunities
• Information that is material might change over time

ISSB discussion

ISSB members noted that educational material can only elaborate on requirements, not create new requirements. It should also not repeat information. Therefore, the staff should prioritise conciseness of the document as longer documents tend to be seen as creating requirements. This will also show that it is not a complex topic.

One ISSB member pointed out a great opportunity with this material to demonstrate how ‘materiality’ is similar and how it is different from ‘materiality’ used in a financial reporting context. ISSB members suggested to use the graphics that are included in the slide deck also in the educational material and focus on examples to illustrate the requirements. The Chair and other ISSB members agreed with including the graphics and offered suggestions on individual graphics as to how they could be improved. One ISSB member suggested to have a further discussion on the concept of material information changing over time, as this could be seen as the most complex topic in this material.