Legal & Regulatory News

ISSB publishes IFRS Sustainability Disclosure Standards

On 26 June 2023, the International Sustainability Standards Board (ISSB) of the International Financial Reporting Standards Foundation (IFRS) published two disclosure standards, IFRS S1 and IFRS S2. The ISSB hopes that the standards will enable more transparent communication between companies and investors.

The ISSB set out to create sustainability- and climate- related disclosure standards as part of its objective to create a global baseline of sustainability disclosures. The standards underwent a consultation process from March to July 2022, and were updated based on the responses received. The standards also incorporate recommendations from the Taskforce on Climate-Related Financial Disclosures.

The two disclosure standards published by the ISSB are:-

• IFRS S1 - this standard provides detail on disclosing general sustainability-related information. The ISSB recommends that disclosures should centre on governance, strategy, risk management and metrics and targets; and
• IFRS S2 - this standard will allow companies to disclose climate-related risks, including physical and transition risks, and opportunities.

It is intended that disclosures under IFRS S1 and IFRS S2 should be provided together with financial information, so that investors have a comprehensive understanding of the relevant company.

The ISSB will be assisting with the voluntary adoption of IFRS S1 and IFRS S2 in different jurisdictions and has established a Transition Implementation Group.

Click here to read the ISSB press release.

Click here to read IFRS S1.

Click here to read IFRS S2.