Ms Lloyd shared her views about the work currently being done at the International Sustainability Standards Board (ISSB), including how the Board is collaborating closely with colleagues in Europe to deliver on its goals. She discussed the following five aspects:
- The need for global sustainability disclosures. Ms Lloyd noted that investors need decision-useful, consistent, comparable information that enables them to understand sustainability-related risks and opportunities. To date, the information that has been provided has been neither consistent, nor tailored to the specific information needs of investors. The ISSB Standards are being developed to enhance investor-company dialogue through by consolidating and inheriting the resources of other investor-focused initiatives in order to reduce fragmentation.
- Overview of IFRS S1 and IFRS S2. Ms Lloyd then gave an overview over the first two ISSB standards, IFRS S1, the general requirements standard, that provides a set of overarching disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term, and IFRS S2 that sets out specific climate-related disclosures and is designed to be used with IFRS S1.
- Support for the ISSB standards. Ms Lloyd especially noted the strong support from the investor community internationally for the consistency and comparability of information the ISSB standards will provide for, the announcement from the Financial Stability Board that as a result of the ISSB standards the work of the TCFD is complete, and endorsement of the standards by the International Organisation of Securities Commissions (IOSCO).
- Cooperation with the European Union. The ISSB welcomes the commitment from the European Commission and EFRAG to support the need for international consistency. The European Union and the ISSB have worked together to improve the interoperability of their respective climate-related disclosure requirements and have managed to achieve a very-high degree of alignment in their climate disclosures. The ISSB's work with European Commission and EFRAG is now focused on how to jointly illustrate the interoperability between the standards.
- Next steps for the ISSB. The ISSB will analyse closely the views of the key stakeholders on the next two-year agenda for the ISSB. Stakeholders have been asked to comment on the strategic direction and balance of the ISSB’s activities; the criteria for assessing which sustainability-related matters to prioritise; and the scope and structure of potential new research and standard-setting projects. An important consideration will be the balance of time spent by the ISSB on advancing new projects and supporting the implementation of IFRS S1 and IFRS S2.
Please click to access the full transcript of the speech on the IFRS Foundation website.