On 26 June 2023, the International Sustainability Standards Board (ISSB) published its inaugural standards. The standards are designed to ensure that companies provide sustainability-related information alongside financial statements – in the same reporting package.
The standards, which fully incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), are:
- IFRS S1 which provides a set of 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. IFRS S1 is effective for annual reporting periods beginning on or after 1 January 2024 with earlier application permitted as long as IFRS S2 is also applied. The objective of IFRS S1 is to require an entity to disclose information about its sustainability-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity.
The ISSB will work with jurisdictions and companies to support adoption.
The first steps will be creating a Transition Implementation Group to support companies that apply the standards and launching capacity-building initiatives to support effective implementation.