REPORTING

ISSB’s Draft of Two Proposed Standards

April 4, 2022

Article Highlights

  • IFRS Foundation sets investor-focused sustainability disclosures for capital markets.

  • Global Reporting Initiative (GRI) sets multi-stakeholder focused sustainability reporting.

  • The standard setting board for the IFRS Foundation is the International Sustainability Standards Board (ISSB).

  • The standard setting board for the GRI is the Global Sustainability Standards Board (GSSB).

  • IFRS Foundation and GRI will join each other’s consultative bodies with respect to sustainability reporting.

Introduction

On March 24, 2022, The IFRS Foundation and GRI signed a Memorandum of Understanding to work together and align their respective standards.

At COP26 we heard strong support for consolidation in the sustainability reporting landscape. The work of the ISSB and its global baseline concept will help deliver this objective for the capital markets, whilst this agreement with GRI will help ensure capital market standards are developed in a way that minimises reporting burden for those companies also using GRI Standards.”

Erkki Liikanen, Chair of the IFRS Foundation Trustees

The collaboration between the GSSB and the ISSB demonstrates our shared commitment to the global alignment of disclosure requirements. This is crucial if we are to enable consistent reporting by companies, which increases accountability and drives responsible business practices. We look forward to aligning work programs and to making the two-pillar corporate reporting system a reality, with financial and sustainability reporting on an equal footing.

Judy Kuszewski, Chair of the GSSB

The IFRS Foundation and GRI plan to provide two ‘pillars’ for sustainability reporting internationally. The first pillar will be investor-focused capital market standard of the ISSB. The second pillar will be compatible with the first pillar while being designed to meet the needs of multi-stakeholders. 

Key Takeaways

Tasks to help you prepare

  • Create an inventory of your company’s greenhouse gas emissions in accordance with the Greenhouse Gas Protocol. The emissions profile of your organization is the initial step to understand your climate-related risks and opportunities. You can then build strategies to mitigate risk and secure opportunities.

  • A company that uses the ISSB and GSSB standards will be able to utilize a suite of complete and compatible sustainability disclosures.

  • Review the article on “ISSB’s Draft of Two Proposed Standards” within our Insights. The two standards are (1) General Requirements for Disclosure of Sustainability-related Financial Information and (2) Climate-related Disclosures. Once the proposed two disclosure standards are complete, it will become a baseline for climate-related disclosures.