With IsoMetrix already working to add the standards to its Lumina software, here’s how the new release may impact your sustainability and ESG reporting.
On 26 June 2023 the International Sustainability Standards Board (ISSB) issued its inaugural standards — IFRS S1 and IFRS S2 — ushering in “a new era of sustainability-related disclosures in capital markets worldwide”.
The new ISSB standards
IFRS S1 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, while IFRS S2 sets out specific climate-related disclosures and is designed to be used with IFRS S1.
The ISSB intend the newly issued standards to provide the right information, in the right way, to support investor decision-making and facilitate international comparability to attract capital. The standards have been developed for use in conjunction with accounting requirements and are built on the concepts that underpin the IFRS Accounting Standards.
This update may create questions for organizations that have used the SASB reporting frameworks previously released by the IFRS. The two new ISSB standards do not replace the SASB standards, but provide additional disclosure guidelines that are more universally adoptable than the industry-specific SASB standards alone. With this release the ISSB has also made updates to the SASB standards, keeping them aligned with IFRS S2’s industry-based guidance.
Emmanuel Faber, ISSB Chair, commented that “Today represents the outcome of more than 18 months of intense work to deliver an inaugural set of sustainability disclosure standards for the global capital markets. The ISSB Standards have been designed to help companies tell their sustainability story in a robust, comparable and verifiable manner. We have consulted closely with the market to ensure the Standards are proportionate and will result in disclosures that are relevant for investment decision-making.”
IsoMetrix and IFRS S1 and IFRS S2
A transition period is expected, and IsoMetrix expects to see some organizations continue to report using the previous frameworks for their 2023 sustainability reporting. Organizations that have historically reported to GRI, CDP, TCFD, or other standards will not be directly impacted by this change and should look towards adopting the latest versions of ISSB’s reporting standards when they begin reporting against guidelines from the IFRS.
IsoMetrix’s Lumina software simplifies the ESG disclosure process, helping users to reduce data sourcing and reporting complexity for climate reporting experts and newcomers alike. The company has already begun incorporating the new IFRS S1 and IFRS S2 standards within its Lumina platform, adding to its extensive library of internationally recognized ESG standards such as CDP, TCFD, GRI, the UN SDGs, and others.
IsoMetrix Lumina will also continue to support the previous SASB reporting standards within the platform, as well as indicate updates to facilitate adoption of the latest reporting standards.