The International Sustainability Standards Board (ISSB) is set to bring about a significant transformation in ESG reporting for Australian businesses, according to BCSD Australia.
The ISSB recently introduced two new sustainability disclosure standards, namely the International Financial Reporting Standards (IFRS) S1 General Requirements for Disclosure of Sustainability-related Financial Information and the IFRS sustainability disclosure standard – IFRS S2 Climate-related disclosures.
These standards, launched in London, are expected to reshape the reporting landscape and play a crucial role in aligning different sustainability disclosure regimes while addressing investor information needs regarding sustainability-related risks and opportunities.
The International Sustainability Standards Board (ISSB) recently launched its inaugural standards, IFRS S1 and IFRS S2, revolutionizing sustainability disclosures in global capital markets. These standards provide a common language for disclosing climate-related risks and opportunities and aim to enhance trust in company disclosures for investment decisions.
The ISSB will support the adoption of the standards, establish implementation groups, and collaborate with jurisdictions and the Global Reporting Initiative (GRI) to ensure effective reporting.
Andrew Petersen, CEO of BCSD Australia, which represents the country’s business sustainability leaders, expressed his enthusiasm for the ISSB’s new sustainability disclosure standards.
He emphasised that these comprehensive reporting standards will transform Australian businesses and capital markets, enabling them to report on their Ambition, Action, and Accountability in their ESG data.
“The ISSB’s new sustainability disclosure standards mark the first major steps in creating alignment between differing sustainability disclosure regimes and helping meet investor information needs on sustainability-related risks and opportunities,” Petersen said.
“The new comprehensive reporting standards will be transformative for Australian business and capital markets in reporting on their Ambition, Action and Accountability in their ESG data.”
The introduction of the IFRS S1 and IFRS S2 disclosure standards is expected to provide Australian businesses with clarity on how to report their environmental, social, and governance issues. Moreover, these standards will facilitate clear and comparable reporting, ensuring consistency across various companies.
Petersen highlighted that by adopting the ISSB’s standards, companies will enhance their ability to meet the escalating expectations of investors, regulators, and the public. In addition, these standards will enable organisations to identify sustainability-related risks and opportunities, leading to better decision-making and resource allocation.
The ISSB, established by the IFRS Foundation, operates as an independent, not-for-profit organisation responsible for developing high-quality, globally accepted accounting standards. The ISSB’s new reporting standards build upon the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and incorporate industry-specific requirements based on the SASB Standards. This approach aims to streamline the sustainability reporting landscape, promote consistency in disclosure practices, and provide a framework that can effectively address the challenges posed by climate change and other sustainability issues.
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