Background and objectives of the session
The International Sustainability Standard Board (ISSB) released its first two reporting standards in June, focusing on climate change. These standards are currently have just been endoorsed by the International Organization of Securities Commissions (IOSCO).
In July the European Commission published the European Sustainability Reporting Standards (ESRS) after a public consultation. These standards encompass climate change and various other environmental aspects such as biodiversity and the circular economy. A notable change is that certain indicators will only be required if they are material to the company. The final standards will be decided by the Commission after consulting the European Parliament and the Council, likely in the last quarter of 2023.
ISSB, EFRAG, and the Commission are collaborating to ensure compatibility between ISSB and ESRS. ESRS incorporates the concept of double materiality, while ISSB adheres to single materiality. The aim is for companies implementing ESRS for climate change to simultaneously implement ISSB standards.
In the United States, the stance on Environmental, Social, and Governance (ESG) issues is divided along political lines, and the status of sustainable reporting standards remains uncertain.
Additionally, a voluntary set of reporting standards has been developed by the Taskforce for Financial-related Nature Disclosures (TFND) and is starting to be adopted by some global companies.
The roundtable’s objective is to evaluate these developments, assess the quality and complexity of different standards, and examine their global interoperability.
Questions to be addressed.
- How do you assess the sustainable reporting standards published by ISSB in June, particularly those focused on climate change? Do these standards strike the right balance between transparency on climate issues and the reporting burden placed on financial and non-financial corporations?
- Do the European Sustainable Reporting Standards released by the European Commission in June for consultation achieve an appropriate equilibrium between transparency on ESG matters and the reporting obligations imposed on financial and non-financial companies?
- Are the ISSB and the EU’s proposed sustainability reporting standards compatible with each other?