Global Sustainability Disclosure Standards are here!!

In a significant milestone for sustainable finance, the International Sustainability Standards Board (ISSB) has released its inaugural standards, IFRS S1 and IFRS S2. These standards mark a new era of sustainability-related disclosures in capital markets worldwide and aim to enhance trust and confidence in company reporting on sustainability matters, empowering investors to make informed decisions.

A Common Language for Climate-related Risks and Opportunities:

For the first time, the ISSB Standards establish a common language for companies to disclose the impact of climate-related risks and opportunities on their future prospects. This breakthrough enables consistent reporting on the climate's effects and facilitates a comprehensive understanding of a company's sustainability performance.

Official Launch and Global Events:

ISSB Chair Emmanuel Faber will officially launch the standards at the IFRS Foundation 's annual conference. Additionally, a series of events will take place throughout the week, hosted by stock exchanges worldwide, including Frankfurt, Johannesburg, Lagos, London, New York, Santiago de Chile, and a launch event in Singapore organized by the ASEAN Capital Markets Forum.

Understanding the Standards:

IFRS S1 provides a comprehensive set of disclosure requirements for companies to communicate their sustainability-related risks and opportunities over the short, medium, and long term to investors. IFRS S2 focuses specifically on climate-related disclosures and is intended to be used in conjunction with IFRS S1. Both standards fully incorporate the recommendations of the FSB Task Force on Climate-related Financial Disclosures (TCFD) .

Responding to Global Demand:

The ISSB developed IFRS S1 and IFRS S2 based on extensive market feedback and in response to calls from prominent entities such as the G20, the Financial Stability Board, and the International Organization of Securities Commissions - IOSCO . This signifies the widespread demand for consistent and comprehensive sustainability disclosures that provide a deeper understanding of how sustainability factors impact a company's performance.

A Global Baseline:

The ISSB Standards are designed to ensure that sustainability-related information is provided alongside financial statements, presenting a holistic view of a company's operations. These standards can be used in conjunction with any accounting requirements and are aligned with the concepts underlying the widely adopted IFRS Accounting Standards. With applicability in over 140 jurisdictions, the ISSB Standards establish a truly global baseline.

Adoption and Implementation:

With the issuance of IFRS S1 and IFRS S2, the ISSB will collaborate with jurisdictions and companies to support adoption. This includes establishing a Transition Implementation Group to aid companies applying the standards and launching capacity-building initiatives to ensure effective implementation. Furthermore, the ISSB will continue working with jurisdictions seeking additional disclosures beyond the global baseline and will collaborate with the Global Reporting Initiative (GRI) to support streamlined and efficient reporting when combining ISSB Standards with other reporting frameworks.

The release of the ISSB's inaugural sustainability disclosure standards represents a significant step toward harmonizing and enhancing sustainability reporting globally. By providing a common language and a comprehensive framework, these standards empower companies to communicate their sustainability risks, opportunities, and climate-related impacts transparently. The ISSB's commitment to supporting adoption and facilitating collaboration underscores the importance of aligning financial and sustainability reporting for a more sustainable and resilient future.

These important sustainability-related topics, including the ISSB's inaugural global sustainability disclosure standards, will be extensively discussed at the upcoming ESG Summit Europe . We cordially invite you to join us on September 28th and 29th in Madrid for insightful discussions, engaging presentations, and networking opportunities with industry leaders.

ESG Summit Europe is committed to driving sustainable practices and fostering meaningful dialogue to address the challenges and opportunities in today's rapidly evolving world. We look forward to welcoming you to this impactful event.

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