Deloitte comment letter on the ISSB’s proposed IFRS sustainability disclosure taxonomy
We have commented on the ISSB’s Proposed IFRS Taxonomy — IFRS Sustainability Disclosure Taxonomy.
We encourage the ISSB to finalise its initial IFRS Sustainability Disclosure Taxonomy. In our more detailed comments, in the Appendix, we identify some matters that we would like the ISSB to consider before finalising the Taxonomy. The most significant of these relates to the proposed level of tagging. We think the taxonomy should provide elements at a much more granular level than proposed, but that the ISSB should also make it clear that the existence of a more detailed element does not compel an entity to tag its disclosures to that level. We see the determination and prescription of the level of tagging as a matter for securities regulators.
We have made some suggestions for additional steps the ISSB could take to make it easier for preparers to apply the taxonomy and suggested that it would be useful to capture connections between disclosures. We have also suggested that the ISSB should field test the Taxonomy with a view to developing application and educational guidance to support it and, as such, we believe that the field testing could be undertaken using the finalised Taxonomy. These suggestions for additional steps need not delay finalisation of the Taxonomy.
Lastly, the application of the IFRS Accounting Taxonomy has not been the subject of a post-implementation review. We see the development of the IFRS Sustainability Disclosure Taxonomy as an appropriate time to consider undertaking such a review. The Proposed Taxonomy uses much of the architecture of the IFRS Accounting Taxonomy. Understanding how consistently entities tag financial statement disclosures could help the IFRS Foundation develop application guidance, or highlight areas where the architecture of the taxonomies might need to be reconsidered. A review could also include assessing the implications of recent, and anticipated, developments in AI on the purpose, design and maintenance of the taxonomies.
Please click to download the full comment letter below.
