The IFRS Foundation’s International Sustainability Standards Board (ISSB) has just announced a series of initiatives designed to harmonize sustainability reporting requirements for companies. These efforts focus on the disclosure of corporate climate transition plans and the measurement of greenhouse gas (GHG) emissions across the value chain.
Key Announcements
Under the new initiative, part of the ISSB’s two-year work plan, the following major developments were revealed:
- Transition Plan Taskforce Disclosure Framework
The IFRS Foundation will now oversee the Transition Plan Taskforce’s (TPT) disclosure framework. This move supports the growing trend of corporate climate-related disclosures, which include targets for transitioning to a lower-carbon economy. The aim is to streamline these disclosures and reduce market fragmentation. The TPT materials will be integrated into the IFRS Sustainability Knowledge Hub. In the short term, these resources will be used to develop educational materials and ensure compatibility with IFRS S2. In the longer term, they will aid in enhancing the application guidance within IFRS S2.
Amanda Blanc, Group CEO of Aviva Group and Transition Plan Taskforce Co-Chair, commented:
“Companies developing and disclosing transition plans need clear and consistent guidance. Today’s announcement that the International Sustainability Standards Board will look to use the resources we have developed in the Transition Plan Taskforce is brilliant news and an important step towards greater consistency and clarity.”
- Agreement with GHG Protocol
The IFRS Foundation has signed an agreement with the GHG Protocol to ensure compatibility between their GHG reporting standards. This collaboration will establish governance arrangements for the ISSB to participate in updates and decisions related to the GHG Protocol standards and guidance. Additionally, an ISSB representative will serve as an observer on the GHG Protocol Independent Standards Board.
Professor Alexander Bassen, Chair of the GHG Protocol Independent Standards Board, stated:
“This coordination between the IFRS Foundation and GHG Protocol is a momentous step in standardizing GHG reporting globally. The deepening of the collaboration between the two parties will be a great benefit to companies seeking to measure, manage, and report on their GHG emissions. Close collaboration with the IFRS Foundation will be invaluable to GHG Protocol’s standards update process for the suite of corporate standards.”
Moving Forward
These initiatives by the ISSB represent significant progress toward creating unified and consistent sustainability reporting standards. By integrating the resources of the Transition Task Force and aligning with the GHG Protocol, the ISSB aims to reduce the complexity of sustainability reporting for companies worldwide. This will provide clearer guidance and enhance the quality and comparability of sustainability information, enabling better decision-making by investors, regulators, and other stakeholders.
As the ISSB continues to implement its two-year work plan, these developments underscore its commitment to establishing a global baseline for sustainability-related financial disclosures, ultimately fostering a more sustainable global economy.
