The IFRS Foundation’s International Sustainability Standards Board (ISSB) announced a series of moves today aimed at guiding jurisdictions in the adoption of the ISSB’s sustainability reporting standards, and in enabling the standards to “serve as a global passport,” for acceptance of standards-aligned reports across jurisdictions.
The ISSB was launched in November 2021 at the COP26 climate conference, with the goal to develop IFRS Sustainability Disclosure Standards to provide investors with information about companies’ sustainability risks and opportunities. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023.
Introduced by ISSB Chair Emmanuel Faber at the IFRS Foundation’s annual Sustainability Symposium, the new initiatives come as the number of jurisdictions planning to use ISSB Standards has grown to approximately 40, which the organization said has led to a need to address “potential fragmentation.”
At the Symposium, Faber announced a significant expansion of the Jurisdictional Working Group, initially established in 2022 to enhance compatibility between the development of the standards and other jurisdictional initiatives on sustainability disclosures, into the newly renamed Jurisdictional Adopters Working Group, focused on facilitating discussions among regulators on enabling the ISSB standards to serve as a global passport, including addressing emerging cross border issues.
The ISSB said that the expansion of the group responds to the growing number of jurisdictions planning to use the standards, and “the need for a mechanism to help stakeholders discuss global passporting arrangements.”
The ISSB said:
“The introduction of passporting provisions, so that jurisdictions accept reports prepared in accordance with the ISSB Standards as issued by the ISSB—accommodating jurisdiction-specific conditions as needed—will help lower costs for preparers and reduce frictions in the system to deliver efficiencies and comparable information for capital markets and preparers.”
In addition to the expansion of the group, the ISSB also released a new “Jurisdictional Rationale Guide” to help jurisdictions as they develop sustainability-related reporting regimes tailored to their specific needs and objectives while contributing to globally consistent and comparable information for capital markets, in addition to an accompanying Jurisdictional Rationale Tool for the development of a clear rationale for using the standards, and to help guide the determination of an adoption roadmap.
ISSB Chair Emmanuel Faber said:
“The expansion of the Jurisdictional Adopters Working Group and our new guide respond to jurisdictions’ needs for forums, tools and resources supporting the effective use of ISSB Standards as the global passport.”
