What do the upcoming changes to ISSB mean for Australian businesses?

Executive Summary:

This report provides a summary of recent research articles on the upcoming changes to the International Sustainability Standards Board (ISSB) , with a focus on Sections S1 and S2. The ISSB is a globally recognised framework for assessing and reporting sustainability performance. The research findings outlined in this report shed light on the implications of the changes to Australian businesses. Based on the analysis, this report presents five key recommendations for businesses to adapt to the new #ISSB requirements.

Table of Contents:

1. Introduction
2. Detailed Summary 2.1 Overview of ISSB 2.2 Changes to Sections S1 and S2 2.3 Implications for Australian Businesses
3. Recommendations 3.1 Recommendation 1 3.2 Recommendation 2 3.3 Recommendation 3 3.4 Recommendation 4 3.5 Recommendation 5
4. Conclusion

1. Introduction:

The International Standard for Sustainable Business (ISSB) is a widely adopted framework that provides guidelines for assessing and reporting sustainability performance in organisations. Recently, changes have been proposed to Sections S1 and S2 of the ISSB. This report aims to summarise the key research findings on these upcoming changes and their implications for Australian businesses. The report further presents recommendations for businesses to align with the new ISSB requirements.

2. Detailed Summary:

2.1 Overview of ISSB: The ISSB is a comprehensive framework that helps organisations integrate sustainability into their business practices and measure their environmental, social, and governance (ESG) performance. It enables companies to disclose their sustainability initiatives and achievements, fostering transparency and accountability.

2.2 Changes to Sections S1 and S2: The proposed changes to Sections S1 and S2 of the ISSB primarily focus on strengthening the requirements related to climate change mitigation and adaptation, as well as social responsibility. The updates aim to address emerging sustainability challenges, such as the need to reduce greenhouse gas emissions, promote circular economy practices, and enhance supply chain transparency.

2.3 Implications for Australian Businesses: Recent research indicates several implications for Australian businesses as a result of the upcoming changes to the ISSB:

• Increased emphasis on climate-related risks and opportunities: Companies will need to assess and disclose their exposure to climate risks, implement measures to mitigate them, and identify opportunities for innovation and growth in a low-carbon economy.
• Enhanced reporting on social impact: The revised ISSB will require businesses to provide more comprehensive information on their social initiatives, including diversity and inclusion efforts, community engagement, and labour practices. This will contribute to building trust and reputation among stakeholders.
• Strengthened supply chain sustainability: The changes to S2 will place greater emphasis on supply chain sustainability, requiring organisations to assess and disclose environmental and social risks throughout their value chains. Australian businesses will need to collaborate closely with suppliers and implement sustainable sourcing practices.
• Integration of sustainability into core business strategies: The updated ISSB will encourage organisations to embed sustainability considerations into their strategic decision-making processes, ensuring that sustainability becomes a core part of their business models.
• Market differentiation and access to capital: Aligning with the ISSB's updated requirements can enhance a company's reputation, differentiate it from competitors, and improve access to sustainable investment capital.

3. Recommendations:

Based on the research findings, the following recommendations are put forth for Australian businesses to adapt to the upcoming changes in ISSB:

3.1 Recommendation 1: Conduct a thorough sustainability assessment: Evaluate the organisation's current sustainability performance, identify gaps, and develop strategies to address climate-related risks and social impact.

3.2 Recommendation 2: Enhance climate change resilience: Implement measures to reduce greenhouse gas emissions, increase energy efficiency, and foster climate resilience across the organisation and its supply chain.

3.3 Recommendation 3: Strengthen social responsibility initiatives: Prioritise diversity and inclusion efforts, promote ethical labour practices, and engage in meaningful community partnerships to enhance social impact.

3.4 Recommendation 4: Collaborate with suppliers for sustainable sourcing: Establish strong supplier relationships, assess supplier sustainability performance, and work together to improve supply chain transparency and sustainability.

3.5 Recommendation 5: Integrate sustainability into core business strategies: Embed sustainability considerations into strategic decision-making processes, aligning long-term business goals with environmental and social objectives.

4. Conclusion:

The upcoming changes to ISSB Sections S1 and S2 signal a significant shift in the way businesses measure and report sustainability performance. Australian businesses must adapt to these changes to remain competitive and address emerging sustainability challenges. By implementing the recommended strategies, organisations can enhance their sustainability practices, improve stakeholder trust, and access new opportunities in the evolving sustainable business landscape.

Access Expert Support

If your organisation is not prepared for these changes which are expected to come into effect in January 2024, you may need some support. Contact me to find out how we can get you ready for these significant changes and your organisations increased obligations.

Author

Geoff Gourley is a leading Global Social Innovator, Entrepreneur, Impact Investor and Director of ESG at Apricot Consulting, in 2017 acknowledged in the Top 100 Social Entrepreneurs & Innovators around the world. He has 30 years’ experience in design, property, construction, and all things Environmental, Social, Governance and Impact.

+61 0428 317 387

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Apricot Consulting Consulting

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