The creation of the International Sustainability Standards Board (ISSB) in November last year marked a major step toward consolidation in the sustainability reporting world.
The new organization brings together the Value Reporting Foundation, which houses the SASB Standards and Integrated Reporting Framework, and the Climate Disclosure Standards Board, leading to a notable narrowing of the alphabet soup of reporting bodies.
To begin with, the ISSB is developing two sets of standards: the S1 general requirements and the S2 climate disclosures. But what does this all mean for the range of existing standards and frameworks – SASB, TCFD, GRI et al – that corporate reporters have become familiar with in recent years? How does the ISSB’s work align with proposed national reporting rules? And how can IR teams prepare themselves for the changes ahead?
At the IR Magazine Think Tank – Europe 2022, attendees heard the answers in an exclusive interview between Steve Wade, IR Magazine’s head of event content, and Sue Lloyd, the ISSB’s vice chair.
Although IR Magazine Think Tanks are generally off-the-record events, the ISSB has given permission to reproduce the conversation here. Some comments have been edited for clarity and brevity.
How are you looking to navigate the puzzle of stakeholders that have a vested interest in the development of the standards?
It probably sounds a bit flippant to say, but the short answer is that we’re engaging the whole world in what we’re developing here with our global baseline. And I can say that without exaggerating because we are asking everybody who’s interested to look at our proposals and to send us letters – all comers are welcome.
More specifically, we’re interested in views from preparers providing the information, investors that will use the information, securities regulators that will be interested in the adoption of the standards and the audit firms that will be responsible for assurance.
We’re also working with jurisdictional working groups so we have established a jurisdictional working group comprising representatives from the UK, the EU, China, Japan, the US and us to try to get this global baseline idea to work.
Overall, we want feedback in order to understand whether what we’re asking for is operational, what the cost of it is for preparers, whether the information is useful for investors and whether it’s capable of being assured. We’re talking to all the parties we need to consult in order to really get that full sense of feedback.
And the other thing I should say is that we really want this to be a global baseline so we are particularly interested in making sure we understand aspects of proportionality. Can smaller companies do this, for example? And what are the implications for emerging economies?
This is an extract of an article that was published in the Fall 2022 issue of Corporate Secretary sister publication IR Magazine. Click here to read the full article.