IAASB advances the timeline for sustainability assurance standard proposal
The International Auditing and Assurance Standards Board (IAASB) confirmed its intention to advance the consultation on a new sustainability assurance standard International Standard on Sustainability Assurance (ISSA) 5000. IAASB hopes to gain broad and early input on the draft ISSA 5000 and have the final standard ready in 2024.
The ISSA 5000 Exposure Draft is subject to the IAASB’s approval this June. The consultation is expected to open end of July/early August 2023.
IOSCO supports IAASB plans for early engagement on sustainability assurance standard
The International Organization of Securities Commissions (IOSCO) welcomed the IAASB initiative to advance the consultation on sustainability assurance standard ISSA 5000.
IOSCO issued a report outlining key considerations for an effective global assurance framework on sustainability reporting. In the report, IOSCO:
- encourages timely and high-quality profession-agnostic standard-setting in the public interest
- calls for early engagement with preparers, investors and providers
- supports capacity building across the entire sustainability reporting ecosystem
IOSCO issues its 2023 – 2024 Workplan
IOSCO confirmed it will work on sustainability reporting but also on sustainability assurance standards, including:
- reviewing ISSB standards towards a potential endorsement
- reviewing how different jurisdictions are using the new standards, and
- helping in capacity building
- setting out its vision and recommendations for assurance standards
- engaging with the standards setters on the development of the assurance standards.
IASB launches project on climate-related risks in financial statements
The International Accounting Standards Board (IASB) initiated a project to explore whether and how companies can provide better information about climate-related risks in their financial statements. The outcome could be minor amendments to the existing IFRS accounting standards, new application guidance, new examples, or further educational materials. However, the project will not result in a new IFRS accounting standard.
Andreas Barckow, IASB Chair, explained that the project illustrates connection between the work of the IASB and the International Sustainability Standards Board (ISSB).
ISSB prioritises climate-related disclosures
The ISSB added a transitional relief enabling companies to ensure they meet investor information needs. This will apply to climate change in the first reporting year using the ISSB Standards.
In the second year of the ISSB standards application, companies will need to provide reporting beyond climate, including other sustainability topics.
TNFD Prototype Framework published
The Taskforce on Nature-related Financial Disclosures (TNFD) issued its prototype (Beta Release) framework. The framework prototype includes:
- concepts and definitions
- recommended disclosures
- LEAP (Locate, Evaluate, Asses, Prepare) approach for assessment and management of nature-related risks and opportunities
- TNFD methodologies, and
- technical guidance.
The prototype is open for public testing and feedback. TNFD framework will be published in September 2023 for market adoption.
ISSB open consultations on agenda priorities and SASB international applicability
The ISSB will ask for feedback on its agenda priorities, specifically on four identified potential projects:
- biodiversity, ecosystems and ecosystem services
- human capital
- human rights, and
- integration in reporting
Stakeholders can expect a consultation in May with a comment period of 120 days. The ISSB will also open a 90-day consultation on its proposed methodology for revising the SASB Standards to improve their international applicability.