IT IS OFFICIAL - Businesses are to start collecting ESG disclosure information from 2024
The International Sustainability Standards Board (ISSB) has confirmed it will issue its first reporting standards at the end of Q2 2023.
The decision, which was ‘unanimously approved’, was announced Feb 17th, 2023. The unanimous decision is due to the strong demand from stakeholders & investors for companies to disclose sustainability-related data and information.
In an official statement, the IFRS says the ISSB has agreed for IFRS S1 and IFRS S2 to be effective from January 2024. This means businesses would collect sustainability disclosure information for the 2024 reporting cycle and publish reports in 2025.
The Chairman of The International Organization of Securities Commissions (IOSCO), Jean-Paul Servais said: “IOSCO is very pleased to see the determined progress being made by the ISSB in completing this milestone. It is particularly important that the ISSB has confirmed that its standards will be ready for use as early as January 2024. We note that the audit standard setters IESBA and IAASB are also aiming to have assurance standards available before the end of 2024. Together, these standards will meet an urgent need in financial markets to get away from the current fragmented situation when it comes to sustainability disclosures.”
Establishing a global ESG baseline
ISSB chair Emmanuel Faber says: "We responded to the capital market and G20 demand for a common language of investor-focused, sustainability-related disclosure, working diligently to deliver standards that fulfil the global baseline. Setting a 2024 effective date is consistent with this demand."
The ISSB’s reporting standards set a baseline level of disclosure to meet the market’s needs. Individual countries’ accounting standards boards and other regulators can then adapt the standards to their own jurisdiction's requirements.
"As requested by our stakeholders, we have built from existing market-accepted frameworks and standards. This means the thousands of companies already using the TCFD recommendations and SASB Standards will be in a strong position to use S1 and S2."
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