The introduction to the consultation notes that when the Task Force issued its final recommendations, "it was aware of the limitations of reporting certain metrics as well as the nascency of climate-related reporting at the time, and anticipated that metric disclosure would evolve as climate-related financial reporting matured". The developments especially noted are around global standard convergence:

• The “Group of Five” (CDP, CDSB, GRI, IIRC, SASB) and their prototype climate-related financial disclosure standard;
• the announcements of the IFRS Foundation Trustees regarding a possible International Sustainability Standards Board (ISSB), their strategic direction, and the formation of a working group; and
• the IOSCO announcements welcoming the IFRS Foundation initiative and announcing plans to work with the IFRS Foundation as well as noting strong support for this work coming out of its stakeholder groups.

In response to these developments, progress around certain metrics and newly identified areas warranting additional guidance, the TCFD has developed its Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans to serve two purposes:

• to provide general guidance for organisations seeking to establish relevant metrics, targets, and transition plans around their climate-related risks and opportunities, and
• to propose specific changes to the guidance for all sectors and supplemental guidance in the 2017 final report and in the guidance on implementing the recommendations.

Comments on the proposed guidance, which comes with an associated Measuring Portfolio Alignment: Technical Supplement, are requested by 7 July 2021. The Task Force will take the consultation responses into consideration when releasing final guidance in the fall of 2021. Please click to access both documents on the TCFD website.

The webinar will take place on 6 July 2021 from 15:00 to 16:30 (Brussels time). Please click for more information and registration on the EFRAG website. A detailed programme can be accessed here.

The discussion paper is still open for comments until 31 July 2021.

Update: On 17 September 2021, the EFRAG has made available a summary report and recording of the webinar.

Recording of the presentations as well as the slide decks are now available on the IASB website.

IAS 2 Inventories—Costs Necessary to Sell Inventories: In February 2021, the Committee discussed a submission about whether an entity includes all costs necessary to make the sale or only those that are incremental to the sale as the “estimated costs necessary to make a sale” when determining the net realisable value of inventories. In the meeting, most of the Committee members agreed with the analysis and conclusion that IAS 2 does not allow an entity to limit such costs to only those that are incremental but raised concern that such a conclusion may contradict with predominate practice. The responses from the comment letters are similar and some respondents requested additional clarifications.

IAS 10 Events after the Reporting Period—Preparation of Financial Statements when an Entity is No Longer a Going Concern: In February 2021, the Committee discussed a submission asking firstly, whether an entity can prepare financial statements for prior periods on a going concern basis if it was a going concern in those periods and had not previously prepared financial statements for those periods; and secondly, if it had previously prepared financial statements for the preceding period on a going concern basis, whether it is required to restate comparative information in respect of the preceding period to reflect the basis of accounting used in preparing the current period's financial statements. In the meeting, the Committee members agreed with the answer “yes” to the first question and “no” to the second question. Most of the respondents to the tentative agenda decision agreed with the staff analysis. There were some respondents who disagreed with some aspects of the analysis and/or requested clarifications.

The staff continue to support their views on the above two agenda decisions through analysis of these comments and concluded that the tentative agenda decisions should be finalised with no change.

IFRS 9 Financial Instruments—European Central Bank’s Third Targeted Longer-Term Refinancing Operations Programme: The Committee received a submission asking how banks account for the European Central Bank (ECB)’s Targeted Longer-Term Refinancing Operations (TLTRO). Specifically, the submission asked whether the TLTRO III tranches are loans at a below-market interest rate which should be accounted for as a government grant. Moreover, it asked how banks calculate the applicable effective interest rate, account for changes in estimated cash flows due to the revised assessment of meeting the conditions attached to the liability and account for changes in cash flows related to the prior period that result from the bank’s lending behaviour or from changes in the TLTRO III conditions determined by the ECB.

The staff analysed the general criteria of a government grant in IAS 20 and explained that the Committee is not in a position to provide a view as to whether the TLTRO III contains a government grant because the assessment involves non-accounting questions. For the matters related to calculating the effective interest rate and estimation of future cash flows, the staff considered that they are too narrow for the Committee to consider in isolation and should be addressed as part of the Board's post-implementation review of the classification and measurement requirements of IFRS 9 ("PIR").

The staff recommended not to add a standard-setting project and instead issue a tentative agenda decision on this issue.

IFRS 16 Leases— Power Purchase Agreements in a Gross Pool Electricity Market: The Committee received a request about an electricity retailer’s (customer) accounting for a power purchase agreement (“PPA”) in a gross pool electricity market. The request asked whether, applying IFRS 16:B9(a), the customer has the right to obtain substantially all the economic benefits from the use of the windfarm throughout the 20-year term of the PPA. The staff analysed that the PPA provides the customer with neither the right to obtain electricity from the windfarm nor the obligation to purchase any particular amount of electricity either from the windfarm of the grid, and accordingly, the customer has no right to obtain substantially all the economic benefits from the use of the windfarm.

The staff recommended not to add a standard-setting project and instead issue a tentative agenda decision on this issue.

Work in progress: There is no new matter currently under analysis.

The full agenda for the meeting and our com­pre­hen­sive pre-meet­ing summaries can be found here.

The Eminent Persons Group is chaired by Jean-Claude Trichet, former President of the European Central Bank. Additional members are Sheila Bair, former Chair of the US Federal Deposit Insurance Corporation, Nandan Nilekani, Chair and co-founder of Infosys, Guillermo Ortiz, former Governor of Banco de Mexico and former Chair of the Bank of International Settlements, and Min Zhu, former Deputy Managing Director of the International Monetary Fund. The group has held its first meeting and will have regular engagement with the Trustees.

The Trustees now have four groups they work with in the context of their sustainability initiative:

• The Trustees’ Steering Committee provides strategic direction and project oversight and makes recommendations on key decisions for endorsement by all Trustees.
• The Eminent Persons Group provides strategic advice and counsel to the Trustees.
• The Technical Readiness Working Group is working on providing the ISSB with a ‘running start’.
• The Multilateral Working Group does preparatory work for a building-blocks approach and facilitates interaction with other international/jurisdictional initiatives.

The press release on the IASB website also notes that an update on the work of the Technical Readiness Working Group is due to be published later this week.

As part of the launch, two publications have been published on the TNFD website:

• NATURE IN SCOPE: A summary of the proposed scope, governance, work plan, communication and resourcing plan for the TNFD
• Proposed Technical Scope Recommendations for the TNFD

Please see also the press release on the TNFD website announcing the launch as well as a letter by the two newly appointed Co-Chairs.

In the final communiqué, the Finance Ministers and Central Bank Governors emphasise the need to green the global financial system so that financial decisions take climate considerations into account as this would help mobilise the trillions of dollars of private sector finance needed, and reinforce government policy to meet their net zero commitments. The communiqué notes:

We support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants and that are based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, in line with domestic regulatory frameworks. Investors need high quality, comparable and reliable information on climate risks. We therefore agree on the need for a baseline global reporting standard for sustainability, which jurisdictions can further supplement. We welcome the International Financial Reporting Standards Foundation’s programme of work to develop this baseline standard under robust governance and public oversight, built from the TCFD framework and the work of sustainability standard-setters, involving them and a wider range of stakeholders closely to foster global best practice and accelerate convergence. We encourage further consultation on a final proposal leading to the establishment of an International Sustainability Standards Board ahead of COP26.

Please click for the full communiqué on the UK government website. In a press release on the IASB website, the Trustees appreciate the support in the G7 communiqué.

The feedback from the survey will be used to assist the IASB and EFRAG on possible future projects. The survey is open until 17 September 2021. Please click for more in­for­ma­tion and access to the survey on the EFRAG website.

For the convenience of participants in different time zones there will be two sessions, one in the morning and one in the afternoon.

Please click for more information, registration and submitting questions on the IASB website.

Apart from the Chair's welcome and preview and an address by the IASB Chair Hans Hoogervorst, the only topic of discussion was the recently launched third agenda consultation.

General comments from Advisory Council members included:

• The possibility to involve external partners in some areas (eg, digital financial reporting) to help alleviate some of the Board’s capacity constraints.
• The Board’s agenda consultation focuses on the Board’s current scope of work. However, areas of digitalisation, stakeholder engagement, and understandability and accessibility are also relevant to the ISSB. Therefore, feedback on this agenda consultation may also provide valuable information for future work of the ISSB and its standard-setting processes.
• The need to allocate some of the Board’s resources to coordinating the work of the Board and a new ISSB.
• IFRS 17 Insurance contracts has started becoming quite topical.

In breakout sessions, the Advisory Council members discussed the strategic direction and balance of the Board’s activities for 2022 to 2026. They provided some comments on the Board’s six main activities:

• New IFRS Standards and major amendments to IFRS Standards
• Maintenance and consistent application of IFRS Standards
• The IFRS for SMEs Standard
• Digital financial reporting
• Understandability and accessibility of the Standards
• Stakeholder engagement

Regarding the criteria for assessing the priority of financial reporting issues that could be added to the Board’s work plan, Advisory Council members commented that the criteria could be split into essential criteria and non-essential criteria. The Board could also consider other criteria. They also noted that there is a lot of overlap and similarities between the first four criteria proposed by the Board. When there is a deficiency in current reporting, the Board should also consider the costs and benefits of leaving the gap unaddressed. The Board should consider the importance of the matter to a broad range of stakeholders, not only to investors. Advisory Council members also noted that it would be helpful if the Board clarified whether the criteria apply to new projects or the Board’s other activities as well, including the post-implementation reviews.

As regards financial reporting issues that could be added to the Board’s work plan, the Advisory Council members mentioned the following issues:

• intangibles,
• cryptocurrencies
• climate-related risks
• discount rates
• discontinued operations and disposal groups
• government grants
• other comprehensive income
• going concern

Some additional possible projects were also mentioned by individual Advisory Council members.

The full meeting summary is available on the IASB's website. There are also recordings of the individual sessions.