On the draft CSRD, Accountancy Europe notes that common standards for sustainability reporting need to be set quickly as such European standards will also provide the necessary basis for digitisation and assurance. However, Accountancy Europe emphasises the need for coordination of the different sustainability reporting initiatives:

It is important for the EC to build on globally accepted standards and contribute to international convergence, especially with the IFRS Foundation’s global sustainability reporting standards in development. Ultimately, consolidated global standards would be best to meet investors’ and capital markets’ needs for information comparability whilst minimising duplications and unnecessary costs.

The same argument is brought forward in Accountancy Europe's newly released publication A constructive two-way cooperation to Sustainability reporting standard-setting. The publication notes that EFRAG and the IFRS Foundation should coordinate and work together as early as possible to produce aligned standards and to avoid duplications and unnecessary costs. It states:

The EC, EFRAG, and the IFRS Foundation with its International Accounting Standards Board (IASB) have been working together on the financial reporting agenda since 2002. As EFRAG is now expanding its role to standard-setting, this cooperation should be extended to sustainability reporting standard-setting.

Please click to access the following information on the Accountancy Europe website:

• Feedback on the Corporate Sustainability Reporting Directive proposal
• A constructive two-way cooperation to Sustainability reporting standard-setting

In addition, the press release on recent developments contains a list of the members of the Project Task Force for beginning with the development of standards (renamed PTF-ESRS) and a list of the members of a Secretariat set up in order to provide technical expertise, project management and drafting input.

Please click for the following additional information:

• EFRAG press release on recent developments regarding ESRS
• EFRAG press release the Statement of Cooperation signed with GRI
• GRI press release the Statement of Cooperation signed with EFRAG

The roadmap, which is accompanied by several document, including a report on promoting climate-related disclosures, notes that the goal of international initiatives in the area of financial disclosures must be to achieve globally consistent, comparable, and decision-useful public disclosures by firms of their climate-related financial risks. To further this overall goal, establishing international standards is important, including accommodating interoperability between a global baseline of international standards and national and regional jurisdiction-specific requirements. Therefore, the FSB welcomes the IFRS Foundation’s programme of work to develop a baseline global sustainability reporting standard under robust governance and public oversight, built from the TCFD framework and the work of an alliance of sustainability standard-setters, involving them and a wider range of stakeholders closely, including national and regional authorities.

The FSB surveyed its members in the first half of 2021 to explore national/regional practices (current or planned) of financial authorities on promoting climate-related disclosures. The survey responses indicated that most jurisdictions strongly support the development of a common global baseline of international reporting standards on climate, with many referencing the ongoing work of the IFRS Foundation. They also signalled that international coordination on requirements to climate-related disclosures is critical and that regulatory and supervisory fragmentation must be prevented.

The roadmap notes that the FSB can play an important role in global coordination, including promoting adoption of the anticipated international reporting standards developed by the ISSB, once developed and if endorsed, as a global baseline. Such internationally agreed standards for disclosures as a global baseline would not preclude authorities from going further or at a faster pace in their jurisdictions. The FSB states that it will continue to act as an international forum for sharing experiences across jurisdictions, promoting best practices, and contribute to discussions in other international fora (such as through COP26 and G7 / G20 meetings) and will continue to support the IFRS Foundation’s work to develop a proposal for a baseline global sustainability reporting standard under robust governance and public oversight. As part of this work, the FSB encourages the IFRS Foundation to address the connectivity between proposed sustainability reporting standards to be developed by the ISSB and existing financial accounting standards. Conditional on the endorsement of this standard, the FSB will encourage FSB member jurisdictions to consider the ISSB’s standard for use for cross-border purposes and when setting sustainability-related disclosure requirements, within the context of individual jurisdictions’ regulatory and legal requirements and in a way that promotes consistent and comparable sustainability disclosures across jurisdictions.

The actions and deliverables are described in detail in the roadmap with an indicative timeline for each of these actions and deliverables provided in tabular format on page 12 of the document. Please click for the following additional information on the FSB website:

• FSB Roadmap for Addressing Climate-Related Financial Risks
• Report on Promoting Climate-Related Disclosures
• Access to additional documents published

As a result of its work and outreach, the FRC has identified a number of challenges that have been grouped into six stages:

• Production — better internal information leads to better decisions and better insight for stakeholders;
• Audit and assurance — reported information is robust and reliable;
• Distribution — information is made accessible to interested parties;
• Consumption — this information leads to better decision making by stakeholders;
• Supervision — information and activity is appropriately monitored and requirements are enforced;
• Regulation — coordinated and coherent regulation leads to efficiency.

For the challenges that must be met in each stage, the paper then explains what the FRC intends to achieve by coordinating within the UK and internationally, by connecting with others across the international environment to foster solutions that are proportionate and effective and by contributing to the discussion through thought leadership, experimentation and coordinated policy consultation responses.

Please click to access the FRC Statement of Intent on Environmental, Social and Governance challenges on the FRC website.

There were two sessions of the webinar, and recordings of them are now available on the IASB website. The slides used during the presentation are also available.

The podcast is hosted by IFRS Interpretations Committee Chair and IASB Vice-Chair Sue Lloyd and Technical Staff member Patrina Buchanan and focuses on configuration or customisation costs in a cloud computing arrangement (IAS 38), costs necessary to sell inventories (IAS 2), other finalised agenda decisions, economic benefits from use of a windfarm (IFRS 16), TLTRO III transactions (IFRS 9 and IAS 20), supplier finance arrangements (IFRS 7 and IAS 7), and the classification of debt with covenants as current or non-current (IAS 1) .

For more information, see the press release on the IASB website.

Participants at the meeting, which was chaired by IASB member Tadeu Cendon, discussed rate-regulated activities, the current agenda consultation, business combinations under common control, agenda decisions of the IFRS Interpretations Committee, the review of the IFRS for SMEs, and the application of IAS 12 Income Taxes. In addition, the EEG received an update on sustainability reporting as well as a general update on IASB projects.

Please click for access to the full report on the IASB website.

The strategy consists of a whole package of measures reflected in statements, communications and a variety of documents. The central Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions also includes a comment on IFRS financial reporting against the background of sustainability aspects:

The Commission strongly supports international work on integrating sustainability considerations into financial reporting and accounting and will seek the highest level of ambition. The Commission will work with the European Financial Reporting Advisory Group (EFRAG), the European Securities and Markets Authority (ESMA) and the International Accounting Standards Board (IASB) to assess whether international financial reporting standards (IFRS) appropriately integrate sustainability risks. [...] In particular, it should be assessed how to recognise and report relevant climate and environmental risks in financial statements adequately and on a timely basis.

Further, the communication also comments on the general debate around sustainability reporting standards and notes that international standards may overlap, be inconsistent and vary in ambition. The Commission, therefore, welcomes efforts for a baseline global reporting standard for sustainability and advocates for comprehensive sustainability reporting standards that address all sustainability issues and capture the double materiality perspective, in line with the recently proposed EU Corporate Sustainability Reporting Directive (CSRD).

Please click to access the package of documents published today on this EC website. Direct access to the central communication is available here.

The HKICPA and the ASBJ provided updates on their respective activities and exchanged views on the accounting for goodwill, the accounting for business combinations under common control, and the IASB’s third agenda consultation.

HKICPA and ASBJ plan to continue these meetings.

Please click for the press release on the ASBJ website.

For the convenience of stakeholders in different time zones, there will be two sessions of the webinar, one in the morning and one in the afternoon. The first session will feature Board Member Rika Suzuki and the second session will feature Board Member Nick Anderson, along with technical staff. The one-hour webinar will include a question-and-answer session.

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

Update: On 19 July 2021, the IASB has issued a recording of this webinar.