February 21, 2023
IFRS Sustainability and Climate Reporting Standards to Take Effect in 2024

As of January 2024, the International Financial Reporting Standards Foundations’ (IFRS) new global sustainability and climate disclosure standards will emerge.

According to the IFRS’s International Sustainability Standards Board (ISSB), the revised reporting standards are due to be set out by the summer allowing companies to start issuing disclosures against the standards in 2025. The move comes from the ISSB in order to respond to a “strong demand from investors for companies globally to disclose comprehensive, consistent and comparable sustainability-related information.”

ISSB Chair Emmanuel Faber, said:

“We responded to capital market and G20 demand for a common language of investor focused sustainability-related disclosure, working diligently to deliver standards that fulfil the global baseline. Setting a 2024 effective date is consistent with this demand.”

At the COP26 climate conference in November, 2021, the ISSB was officially launched, with the clear target of improving IFRS Sustainability Disclosure Standards, as a way of providing a global baseline of disclosure requirements that can be used by jurisdictions either on an unrelated basis or integrated into wider reporting frameworks.

Moreover, the ISSB has set out all of the technical details of the standards, indicating the substance of the standards has now been fully agreed, as well as voting to incorporate a reference to GRI standards and the European Sustainability Reporting Standards (ESRS) as sources to direct companies. The move would enable companies to mull over (if a specific ISSB standard is absent) the application of the IFRS’ general sustainability reporting standard (“S1”).

Efforts on developing further guidance, collaborating with partners on the delivery of a core capacity building program across different economic settings, and training material by the ISSB are welcome as companies gear up to begin reporting against the new standards.

Source: ESG Today