Looking to the future of sustainability reporting: alignment, comparability and digital thinking
Sue Lloyd, Vice-Chair of the International Sustainability Standards Board (ISSB), recently gave a keynote speech to the Brussels Association of German Banks (BdB), offering an informative overview of developments in sustainability reporting. Looking to the future, she acknowledged the importance of digital reporting in interoperability.
The ISSB was established to meet the need for “decision-useful, consistent, comparable” sustainability information, reduce fragmentation, and create an international baseline for disclosures. “The development of this common language for capital markets is a shared endeavour,” says Lloyd, and one that is informed by the demands of the market. Providing a high-level summary of the first two IFRS Sustainability Disclosure Standards, she notes that in the two months since they were issued they have received strong support from the investor community for the consistency and comparability of information they will provide. “Already we know that jurisdictions such as Australia, Japan, Singapore and the UK are looking at routes to introduce the ISSB Standards, and that jurisdictions such as Nigeria have publicly announced their intention to adopt the ISSB Standards early.”
Lloyd particularly discussed the ISSB’s ongoing cooperation with the European Commission and the European Financial Reporting Advisory Group (EFRAG). While Europe is pursuing a broader remit, she reports that a very high degree of alignment with the European Sustainability Reporting Standards (ESRS) has been achieved.
Focus is now shifting to practical implementation, including how to illustrate interoperability between the standards and assist companies in navigating between them. “We will also consider how digital tagging can assist not only in providing investors with information that can be consumed electronically but also in reducing the risk of duplication in reporting by companies using both our standards and ESRS,” says Lloyd.
She also believes that it would be of the greatest benefit for stakeholders for the ISSB, the Commission and EFRAG to continue to communicate jointly on interoperability.
With the ISSB’s consultation on its next strategic priorities now closed, we look forward to more news on forthcoming challenges. “What is clear is that through driving connections to financial statements, fostering trust in disclosure, and promoting further harmonisation of the sustainability reporting landscape, we will be well placed to ensure investors are provided with better information for better economic and investment decision making and that companies will be better able to communicate with investors and attract capital,” concludes Lloyd.
Read the full transcript here