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TAC Public Meeting September 2024 Paper 6: September general reporting update
Executive summary
| Date | 03 September 2024 |
| Paper reference | TAC-Update-September |
| Project | Monitoring |
| Topic | September General Reporting Update |
Objective of the paper
This paper provides key updates since the update paper provided at the July TAC meeting.
This includes a summary of the ISSB meetings and developments, in addition to jurisdictional developments in relation to the adoption of IFRS Sustainability Disclosure Standards to date.
The information in this paper is provided as at 20 August 2024 and does not include any developments after this date.
Decisions for the TAC
There are no decisions required. This paper is for information only.
Appendices
Appendix 1 - Jurisdictional developments
This paper has been prepared by the Secretariat for the UK Sustainability Disclosure Technical Advisory Committee (TAC) to discuss in a public meeting. This paper does not represent the views of the TAC or any individual TAC member.
Context
1The objective of this paper is to inform the TAC of international and jurisdictional developments in sustainability-related reporting. This paper is for information only and does not ask the TAC to make any decisions.
2The TAC will be provided with an update of UK-specific, international and jurisdictional developments on sustainability-related reporting at each of its meetings.
UK developments
3On 25 July HM Treasury issued a proposal draft for the final phase of the mandatory TCFD-aligned climate-related disclosure regime for UK public sector bodies. The reporting requirements apply to central government departments and arms-length bodies which have more than 500 employees or more than £500m in total operating income. This third and final phase focuses on the implementation of the 'Strategy' pillar of the TCFD framework and would become mandatory in the 2025-2026 reporting period.
4The FRC has launched a discussion paper on the future of digital reporting in the UK in conjunction with the FCA, Charity Commission, Companies House, and HMRC. The paper focuses on changes in the regulatory landscape and the impact of the Economic Crime and Corporate Transparency Act 2023.
International Sustainability Standards Board
5The following paragraphs provide a summary of updates from the International Sustainability Standards Board (ISSB).
July 2024
6The ISSB met on 24-25 July to discuss its work plan, its approach to enhancing the SASB Standards, and to receive an update on the June 2024 meeting of the Transition Implementation Group on IFRS S1 and IFRS S2 (TIG).
6.1The ISSB was not asked to make any decisions regarding its work plan. Instead, it discussed ways to include interoperability in its activities, which will be addressed in future board papers as a technical aspect of the ISSB's projects. The ISSB also discussed the design and approach of its initial work on the research projects in its workplan as set forth in April 2024 (on biodiversity, ecosystems and ecosystem services, and human capital). Findings will be considered over the coming months.
6.2The ISSB made a number of decisions regarding the enhancement of the SASB Standards. It will: ensure consistency on common topics; continue further research including how to enhance the Sustainable Classification System (SICS); use a phased approach; start developing exposure drafts of enhancements to a number of standards across the Extractive & Minerals Processing sector, the Infrastructure sector, and ideally also the Food & Beverage sector; consider amendments across the standards to ensure consistency on common topics; continue further research including how to enhance the Sustainable Classification System (SICS).
6.3The ISSB was not asked to make any decisions regarding the update on the TIG. The TIG last met on 13 June for its third meeting. It discussed: revision of preceding period estimated amounts when estimating information from an entity in the value chain; and application of the requirements on comparative information when acquiring or disposing of a subsidiary.
Other IFRS Foundation updates
7The IASB has published a consultation document proposing eight examples illustrating how to apply IFRS Accounting Standards when reporting the effects of climate-related and other uncertainties in financial statements. This follows concerns from investors that information around climate-related uncertainties in financial statements is sometimes insufficient or inconsistent with the information provided outside the financial statements. The examples cover a number of areas including materiality judgement, disaggregation of information, and disclosures about assumptions and estimation uncertainties. The deadline for feedback is 28 November 2024, after which the IASB will decide whether to proceed with these illustrative examples as accompaniments to the IFRS Accounting Standards.
8The IFRS Foundation has published a webcast providing an overview of the ESRS-ISSB Standards Interoperability Guidance released in May. The webcast covers the background to the Interoperability Guidance's publication, common disclosures and alignment across the ISSB Standards and ESRS, approaches for companies seeking to comply with both sets of standards, and incremental disclosures in ESRS.
9The ISSB released the Q2 2024 episode of its Implementation Insights podcast, featuring discussion on the June TIG meeting, including around the requirement for companies to revise estimates in sustainability-related disclosures upon new information becoming available.
Jurisdictional developments
10The following paragraphs provide a summary of updates (since the last TAC meeting) from other jurisdictions in relation to sustainability-related reporting.
11Appendix 1 contains the summary tables of the different jurisdictional decisions relating to the IFRS Sustainability Disclosure Standards. The tables have been updated since the last TAC meeting to reflect the most recent developments.
Canada
12The Canadian Sustainability Standard's Board (CSSB) has published responses to its consultation on its draft standards on general sustainability (CSDS 1, aligned with IFRS S1) and climate-related disclosures (CSDS 2, aligned with IFRS S2). Responses were split regarding its recommendations of lengthening transition reliefs—for CSDS S1 for two years compared to the IFRS S1's one year relief: for the disclosure of Scope 3 emissions under CSDS S2 for two years compared to IFRS S2's one year relief; and for the inclusion of transition relief for climate resilience disclosures. Some stakeholders raised concerns about Canada falling behind on the global baseline.
13A coalition of Canadian NGOs is reported to be establishing a Transition Task Force (TTF) for Canada modelled on the UK's Transition Plan Taskforce. The TTF will launch in October.
European Union
14On 17 July EFRAG's Sustainability Reporting Board (SRB) approved the XBRL Taxonomy for the first set of ESRS standards. This follows a draft published in February, for which feedback from the consultation found that 85% of 50 respondents found XBRL accurately reflects the disclosure requirements in ESRS. Following this approval from the SRB, EFRAG will now aim to finalise and publish the final taxonomy in August.
15The European Commission has published a Frequently Asked Questions document on the implementation of the EU corporate sustainability reporting rules. The document provides an overview of reporting under CSRD, an interpretation of its provisions, and a timeline of its scope and application dates.
Japan
16The Sustainability Standards Board of Japan (SSBJ) has published responses on its consultation on its three draft standards. Some stakeholders have called for the SSBJ to align its proposed sustainability disclosure standards fully with the ISSB standards to support the global baseline, flagging the SSBJ's proposed "theme-based" standard which excludes IFRS S1's references to resources and relationships, and dependencies and impacts. Meanwhile the GRI has urged the SSBJ to consider adopting a double materiality approach by placing impact reporting 'on equal footing with reporting financially relevant sustainability information'. Some responses raised issue with the disclosure of the amount and percentages of assets or physical business activities vulnerable to climate-related transition and physical risk being optional, calling for it to be made mandatory. Other concerns raised included the SSBJ's proposal to allow entities which are subject to the Japanese Act on Promotion of Global Warming Counter Measurements to follow alternative reporting periods for emissions, which could lead to a one year discrepancy between the sustainability-related reporting period and the calculation of GHG emissions under the act.
Sri Lanka
17The Institute of Chartered Accountants of Sri Lanka issued local versions of IFRS S1 and IFRS S2—SLRFS S1 and SLRFS S2—at the end of June. It has also established a Sustainability Disclosure Standards Committee to consider best practices.
United States
18While it is expected that California's climate laws will face delays, other states are beginning to consider climate disclosure legislation with New York, Washington, Illinois and Minnesota each considering bills. Fitch Ratings has published research comparing the bills and detailing the upcoming Federal Supplier Climate Risks and Resilience Rule.
Appendix 1 – Jurisdictional developments
G20 jurisdictions committed to adopting IFRS Sustainability Disclosure Standards
Table 1 summarises the status of G20 jurisdictions publicly committed to adoption or other use of the IFRS Sustainability Disclosure Standards.
Table 1: G20 jurisdictions summary as at 20 August 2024
| Jurisdiction | Current status | Both IFRS S1 & IFRS S2? | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| African Union: Kenya | Publicly committed | - | - | - |
| African Union: Morocco | Publicly committed | - | - | - |
| African Union: Nigeria | Consultation closed | Both | 2028-2030 | Listed & unlisted |
| African Union: Zimbabwe | Publicly committed | - | - | - |
| Argentina | Publicly committed | - | - | - |
| Australia | Consultations closed | Both | 2024 | Listed & unlisted |
| Brazil | https://www.ifrs.org/ifrs-sustainability-disclosure-standards-around-the-world/jurisdiction-consultations-on-sustainability-related-disclosures/Consultation closed | Both | 2026 | Listed |
| Canada | Consultation closed | Both | 2025 | To be confirmed |
| China | Consultation closed | Both | 2026-2030 | Listed & unlisted |
| India | Consultation closed | IFRS S2 only | 2025-2029 | Banking & finance |
| Japan | Consultation closed | Both | - | Listed |
| South Korea | Open consultation | Both | 2026-2030 | Listed |
| Turkey | Endorsed | Both | 2024 | Regulated banks & large |
Other jurisdictions committed to adopting IFRS Sustainability Disclosure Standards
Table 2 summarises the status of non-G20 jurisdictions publicly committed to adoption or other use of the IFRS Sustainability Disclosure Standards.
Table 2: Other jurisdictions summary as at 20 August 2024
| Jurisdiction | Current status | IFRS S1 & IFRS S2? | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| Bangladesh | Endorsed | Both | 2024-2027 | Banking & finance |
| Costa Rica | Endorsed | Both | 2025-2026 | Listed & unlisted |
| Hong Kong | Consultation closed | IFRS S2 only | 2025 | Listed |
| Malaysia | Consultation closed | Both | 2025-2027 | Listed & unlisted |
| Panama | Publicly committed | - | - | - |
| Pakistan | Consultation closed | Both | 2025-2027 | Listed & unlisted |
| Philippines | Consultation closed | Both | 2025 | Listed |
| Singapore | Consultation closed | IFRS S2 only | 2025-2027 | Listed |
| Sri Lanka | Endorsed | Both | 2025 | To be confirmed |
| Switzerland | Open consultation | Both | - | - |
| Taiwan | Publicly committed | - | - | - |
G20 jurisdictions not publicly committed to adopting IFRS Sustainability Disclosure Standards
Table 3 summarises the status of G20 jurisdictions not publicly committed to adoption or other use of the IFRS Sustainability Disclosure Standards.
Table 3: G20 jurisdictions not publicly committed to adopting ISSB as at 20 August 2024
| Jurisdiction | Current status | Topics | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| European Union (EU) | European Sustainability Reporting Standards (ESRS) & Corporate Sustainability Reporting Directive (CSRD) | Ten topical standards including a general and climate change standard | 2024-2028 | Listed & unlisted |
| Indonesia | Unconfirmed | - | - | - |
| Mexico | Unconfirmed | - | - | - |
| Russia | Unconfirmed | - | - | - |
| Saudi Arabia | Unconfirmed | - | - | - |
| South Africa | Unconfirmed | - | - | - |
| United States of America (USA) | Climate disclosure rules by the US Securities and Exchange Commission (SEC) | Climate | SEC: 2025-2033 (currently on hold) | Listed |
| Californian climate-related disclosure regulations adopted (SB 253 and SB 261) | California: 2026 | Listed & unlisted |