The International Sustainability Standards Board announced it will undertake projects to research disclosure about risks and opportunities in the areas of biodiversity, ecosystems and ecosystem services, and human capital.
The research will focus on investor needs in how these risks and opportunities could affect company prospects, and will build on relevant preexisting initiatives when possible. Current initiatives ISSB will assess include Sustainability Accounting Standards Board standards and Climate Disclosure Standards Board guidance, as well as relevant aspects of the work of the Task Force on Nature-related Financial Disclosures.
While disclosure of material information about all sustainability-related risks and opportunities is already required under IFRS S1, with companies asked to refer to sources of guidance to provide appropriate disclosures beyond climate, these new projects will allow the ISSB to establish its own standard setting.
In addition to assessing and defining the limitations of current disclosure in these realms, the research projects will identify possible solutions and areas in need of standard setting.
"Beyond climate, we are committed to building out the global baseline of sustainability-related financial disclosure to meet the needs of investors," said ISSB chair Emmanuel Faber in a statement. "Feedback indicated a significant and growing need among investors for improved disclosures around biodiversity, ecosystems and ecosystems services as well as human capital, as a key source of value for companies."
The ISSB's current priority, for the next two years, is supporting the implementation of the ISSB's inaugural Standards, IFRS S1 and IFRS S2, while these research projects will be the other key area of focus. Based on market feedback, the ISSB decided not to work on projects related to risks and opportunities in the area of human rights (beyond those in its own workforce and workers in its value chain) or integration in reporting at this time, though the board will monitor future developments. The ISSB and International Accounting Standards Board will continue to support the use of the Integrated Reporting Framework as a resource.
The ISSB expects to publish a summary of the feedback on its agenda consultation in June, along with its response to feedback and its two-year work plan.
"Our industry-specific SASB standards continue to be used as a cost-effective way of providing decision-useful information to investors," Faber said in a statement. "We are committed to enhancing the SASB standards further given they will also support our new research areas. We look forward to sharing our work plan for the next two years in June."
