Businesses reporting under new international sustainability standards board (ISSB) disclosure standards will be given an extra to provide disclosure of climate risks.
According to ESG Today, the delay will be implemented by the ISSB in order to enable firms to first focus on climate-related reporting.
The ISSB was originally launched in November 2021 with the focus on developing IFRS Sustainability Disclosure Standards in order to provide a global baseline of disclosure requirements that can be used by jurisdictions on a standalone basis or incorporated into broader reporting frameworks.
The ISSB board previously released the first exposure drafts for its first two reporting standards, covering general requirements for sustainability-related financial information and climate-related disclosures in March 2022. The new standards will be effective as of January 2023, with firms beginning to issue disclosures against the standards in 2025.
Following this move by the ISSB, companies using the new standards will be required to report on climate-related risks and opportunities in the first year of reporting, however they will have an extra year to provide disclosure on other sustainability-related risks, provide annual sustainability-related disclosures at the same time as the related financial statements, disclose Scope 3 emissions or use the greenhouse gas protocol to measure emissions.
ISSB chair Emmanuel Faber said, “The upcoming introduction of the ISSB’s Standards establishing the global baseline is being welcomed by companies urgently looking for tools to meet the information needs of their investors. This transitional relief ensures companies can phase in their approach, initially focusing on the quality of the climate-related information they provide.”
The International Accounting Standards Board (IASB) recently launched a new project aimed at exploring changes to requirements for firms to disclose climate risks in financial statements.
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