ISSB standards may become effective from January 2024

The International Organization of Securities Commissions (IOSCO) welcomed the confirmation statement by the International Sustainability Standards Board (ISSB) setting out its progress in the development of its first sustainability-related corporate disclosure standards. The initial IFRS Sustainability Disclosure Standards S1 and S2 are expected to be issued in the second quarter of 2023 and are slated to become effective from January 2024.

IOSCO noted that the audit standard-setters International Ethics Standards Board for Accountants (IESBA) and the International Auditing and Assurance Standards Board (IAASB) are also aiming to have assurance standards available before the end of 2024. The Chairperson of the Sustainability Task Force of IOSCO further added that IOSCO will move forward with its independent assessment of the ISSB standards in terms of quality and governance, to complete its review in 2023. Furthermore, at a recent ISSB meeting, the ISSB members voted to reference the European Sustainability Reporting Standards (ESRS) within an appendix to S1, which is the general requirements standard of ISSB, as a source of guidance that may be considered by companies in the absence of a specific ISSB standard, to identify metrics and disclosures.

The ISSB announced with the European Commission and EFRAG last December that they are working toward a shared objective to maximize interoperability of their standards and aligning on key climate disclosures. Given that the substantive decisions on the content of the ISSB Standards are now finalized, this joint work will now focus on detailed terminology within the standards, to be completed with the finalization of both sets of standards. ISSB is currently engaging with a number of other jurisdictions and organizations active in sustainability standard-setting in support of the interoperability of its global baseline of cost-effective, decision-useful Standards and to prepare for their effective rollout. ISSB is also looking ahead to future standard-setting priorities and will be consulting in the second of this year on its future work.