29. July 2022
The ASCG has submitted its comment letters (ED IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information /ED IFRS S2 Climate-related Disclosures) on the first two Exposure Drafts of the International Sustainability Standards Board (ISSB). The comment letters confirm ASCG’s support for global standards on sustainability reporting.
The ASCG emphasises the challenge to connect international standards to national and regional legal requirements, such as the future European Sustainability Reporting Standards (ESRS) and calls for a constructive cooperation between the institutions involved.
The orientation towards the structure and content of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) is supported. A need for clarification is seen with regard to basic definitions (such as the term “sustainability”) and the inclusion of further application guidelines (such as with regard to the materiality assessment for the identification sustainability-related information). In addition to reporting on sustainability-related risks and opportunities, more importance should be given to the role of impacts. The ASCG also supports the proposals for an integrated financial and sustainability reporting and encourages a close cooperation between the ISSB and the International Accounting Standards Board (IASB). An essential issue here is the consistency of the Exposure Drafts with the requirements in the IFRS Practice Statement Management Commentary. In principle, the introduction of sector-specific standards is welcomed. However, the approach pursued by the ISSB with regard to the adoption of the standards developed by the Sustainable Accounting Standards Board (SASB) is critical, as the compatibility of rule-based and principle-oriented reporting requirements within a standard is unclear.
Georg Lanfermann, President of the GASC, commented on the publication of ASCG’s comment letters as follows: “The ISSB’s Exposure Drafts represent important milestones towards high-quality and internationally consistent sustainability reporting. In the coming months, it will be essential to complete the groundwork for a proper ‚global baseline‘ by sharpening the Exposure Drafts and working constructively with stakeholders.“
Background: On 31 March 2022 the ISSB on the way to developing a global baseline for sustainability reporting published two Exposure Drafts (ED) and additional documents. Exposure Draft (ED) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information contains general sustainability-related financial information. ED IFRS S2 addresses Climate-related Disclosures. These ED are based on the Task Force on Climate-Related Financial Disclosures (TCFD) and include sector-specific requirements which were developed by the Sustainability Accounting Standards Board (SASB).