In March 2022, the International Sustainability Standards Board (ISSB) – launched in 2021 under the governance of the IFRS Foundation – issued a public consultation on its first two proposed standards: General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related Disclosures (IFRS S2).

Several Partners of the Impact Management Platform submitted responses to the consultation on IFRS S1, either individually or with other Partners, which are set out below:

Individual statements:
Global Steering Group for Impact Investment (GSG)
Organisation for Economic Cooperation and Development (OECD)
Principles for Responsible Investment (PRI)
United Nations Environment Programme – Finance Initiative (UNEP FI)
World Benchmarking Alliance

Joint statements:
Capitals Coalition and Social Value International (supported by various organisations including the Impact Weighted Accounts Initiative)
UN DESA, UNEP FI, United Nations Development Programme (UNDP), United Nations Global Compact (UNGC) (alongside United Nations Conference on Trade and Development (UNCTAD), United Nations Capital Development Fund (UNCDF) and United Nations Regional Commissions)

Two key themes arising from these responses have been identified among the Partners and summarised below. These common messages do not constitute a formal submission, but are rather intended to shed light on the Partners’ shared observations.

  1. Information on impacts is necessary to understand the sustainability-related risks and opportunities that may affect enterprise value. This could be better reflected in the core content of the text.

    The ISSB General Requirements exposure draft acknowledges that an entity’s impacts are a driver of sustainability-related risks and opportunities, and therefore constitutes relevant information to assess enterprise value. Users may require information on entities’ impacts in order to better understand and compare sustainability-related risks and opportunities. The relationship between impacts and sustainability-related risks and opportunities could be more clearly articulated, including under the specific disclosure requirements related to governance, strategy, risk management and metrics and targets.
  2. More guidance on the process for identifying material sustainability-related risks and opportunities would improve the robustness of disclosures.

    Giving entities full discretion on how to identify material sustainability risks and opportunities may render information incomparable and also open the door for selective disclosures, thus making it not useful for primary users. Entities need to consider all their possible sustainability impacts in order to assess their sustainability risks and opportunities. They may also need to disclose which sustainability-related risks and opportunities are not considered significant and material – and why this is the case – as this is relevant for users and necessary for assurers. Contextual information is also necessary to assess risks and opportunities, including information on the entity’s geographic location(s), employee base and value chain.

Contact us for questions or comments related to this work.