The full agenda for the meeting can be found here. We will post any updates to the agenda, our com­pre­hen­sive pre-meet­ing summaries, as well as observer notes from the meeting on this page as they become available.

The letter notes that there is a growing focus on the risks that climate change could pose to financial stability. In that context, the letter notes:

The FSB welcomes the recent publication of the International Sustainability Standards Board (ISSB)’s final standards, which will serve as a global framework for sustainability disclosures and, when implemented, will enable disclosures by different companies around the world to be made on a common basis. The FSB will work with the ISSB, IOSCO and other relevant bodies to promote the timely and wide use of the standards.

Please click to access the full letter on the FSB website.

The IFRS Advisory Council provides a forum for the IASB and the ISSB to consult a wide range of in­ter­ested parties affected by the Boards' work, with the objective of advising the Boards on agenda decisions and pri­or­i­ties in the Boards' 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 release on the IFRS Foundation’s website.

Par­tic­i­pants at the meeting, which was chaired by IASB member Jianqiao Lu, discussed an update on the amendments to classification and measurement of financial instruments, carbon offset, climate-related risk in financial statements, primary financial statements, subsidiaries without public accountability: disclosures, business combinations under common control, and updates on IASB and IFRS Interpretations Committee activities.

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

The response notes that Accountancy Europe believes that the remaining non-alignment between the ESRS and the International Sustainability Standards Board (ISSB) IFRS sustainability standards is a fatal flaw which should be amended by the EC before the adoption of the delegated acts. This would include aligning the currently diverging:

• ESRS’ financial materiality definition and description with the IFRS materiality;
• materiality assessment approaches (ESRS focus on the phenomena whereas ISSB focuses on information); and
• determination of useful information for each type of user of information.

The response also notes that "the process followed was neither ideal nor as intended in the Better Regulation principles". It states that EFRAG developed the first set of ESRS "under extremely challenging deadlines", which resulted in a short consultation period and outsourcing of important tasks. It also notes that the proposed delegated acts "could have merited a broader and longer consultation than the EC’s targeted 4-week feedback period".

Please click to access the full response and a summary press release on the Accountancy Europe website.

In its response, IFAC supports corporate reporting that better addresses a company’s ability to create long-term value and is decision useful for investors and other stakeholders. IFAC welcomes the European Sustainability Reporting Standards (ESRS) while noting significant concerns regarding the need for interoperability that supports a global system for reporting. IFAC notes that all international and regional approaches must align key concepts, terminologies, and metrics to avoid regulatory fragmentation, especially on matters of materiality. The response states:

We strongly support efforts by the European Commission and ISSB to find areas of interoperability in their standards, starting with climate. However, substantive differences remain, so collaboration must continue. [...] ISSB standards should function as a global baseline for all jurisdictions, including the EU for financial materiality, to adopt or align with.

The response also notes that implementation by companies and enforcement by regulators of the new standards are essential to ESRS success. Therefore, IFAC urges additional transitional reliefs to allow companies sufficient time to implement governance, processes, reporting capacity, and internal controls.

Please click to access the full response on the European Commission website.

The ISSB recently published its inaugural standards, IFRS S1 and IFRS S2, which fully incorporate the TCFD recommendations. These standards provide a global baseline for sustainability-related disclosures, ensuring that companies worldwide follow consistent guidelines in reporting climate-related information. 

The Financial Stability Board (FSB), which oversees the TCFD, acknowledged that the ISSB standards mark the culmination of the TCFD’s work since its establishment in 2017. The FSB has now requested the IFRS Foundation to take over monitoring companies’ progress in disclosing climate-related information, a responsibility previously held by the TCFD.

The ISSB is actively supporting the implementation of the IFRS S1 and IFRS S2 standards by promoting capacity building and monitoring progress towards widespread adoption of high-quality climate-related disclosures.

Emmanuel Faber, Chair of the ISSB, commended the TCFD for its role in improving the quality of climate-related disclosures and providing vital information to investors about climate risks and opportunities. He emphasised that the ISSB has integrated the TCFD recommendations into its standards and is pleased to take over the monitoring responsibilities from 2024, building upon the TFCD’s legacy.

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

On Wednesday 12 July, ISSB Vice-Chair Sue Lloyd and ISSB Acting Executive Technical Director Bryan Esterly will present a comprehensive overview of IFRS S1. The primary objective of IFRS S1 is to establish a set of overarching disclosure requirements that enable companies to effectively communicate sustainability-related risks and opportunities to investors.

On Tuesday 18 July, ISSB Vice-Chair Sue Lloyd and ISSB Technical Staff — S2 Lead Caroline Clark-Maxwell will discuss the details of IFRS S2 and its significance in the context of climate-related reporting.

For more information and how to register for these webinars, see the press release on the IFRS Foundation’s website.

Note: A recording of the 12 July session and a recording of the 18 July session are now available on YouTube.

We support the objectives of the European Green Deal and policy and regulation that are designed to enable the flow of high-quality, consistent and comparable sustainability information which is essential to support these objectives. We welcome the steps that the EC has already taken in the draft delegated regulation to simplify the European Sustainability Reporting Standards (ESRS) requirements by ensuring that all disclosure requirements and data points in topical standards are subject to materiality; making some disclosure requirements voluntary; and improving the understandability of the standards. Our key comments are set out in a cover letter with an appendix some comments, requests for clarification, and suggested edits on the draft ESRS, provided by some of our Deloitte experts. Our comments submitted do not represent an exhaustive set of comments due to the limited amount of time available for review of the draft delegated regulation.

Please click to download our comment letter here.

The podcast is hosted by IFRS Interpretations Committee Chair Bruce Mackenzie and members Karen Higgins and Donné Sephton. Topics discussed include a new submission relating to the application of the ‘own use’ exemption in IFRS 9 and the accounting for hyperinflation in specific circumstances.

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