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TAC Public Meeting October 2024 Paper 8: October general reporting update
AGENDA PAPER 8
Executive summary
| Date | 08 October 2024 |
| Paper reference | TAC-Update-October |
| Project | Monitoring |
| Topic | October General Reporting Update |
| Objective of the paper |
This paper provides key updates since the update paper provided at the September 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 24 September 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
3Analysis of FTSE 100 entities 2023 annual reports by Deloitte found that 46 of the 100 entities made adjustments to previously disclosed climate and sustainability metrics. 44% of the restatements were due to changes in methodology, but 29% were due to errors made in previous reports. 89% of the restatements related to greenhouse gas disclosures, and 32% related to Scope 3 emissions metrics.
International Sustainability Standards Board
4The following paragraphs provide a summary of updates from the International Sustainability Standards Board (ISSB) since 20 August 2024.
September 2024
5The ISSB met on 18 September 2024. Discussions included the connections between the SASB Standards and the ISSB’s research into biodiversity and human-capital related risks and opportunities, and a deep dive into SASB Standards for priority industries (Iron and Steel Producers and Metal and Mining).
6The Transition Implementation Group (TIG) met on 19 September 2024. Discussions covered:
- identification of sustainability-related risks and consideration of risk mitigation activities;
- application of the jurisdictional relief to part of a reporting entity;
- Scope 3 Category 15 GHG emissions related to financial activities and asset classes that are not explicitly referenced in IFRS S2; and
- use of GWP values from the latest IPCC assessment when a jurisdictional authority mandates the use of a different GWP value
7The IFRS Foundation Due Process Oversight Committee met on 9 September 2024 to review the proposed members of the new IFRS Sustainability Reference Group (SRG). The primary remit of this group will be to provide technical input to ISSB members and staff. The size of the group may extend to 150 members, including representatives across jurisdictions, preparers, users and industries.
8The ISSB and IFRS Foundation hosted a number of events at Climate Week New York City. The IFRS Foundation launched the guide, Voluntarily applying ISSB Standards – A guide for preparers at the event.
9The ISSB released the third episode of their webinar series, Perspectives on sustainability disclosure. The episode covered the importance of industry-based disclosures in the ISSB Standards, how the SASB Standards support IFRS S1, the structure of the SASB Standards and the work currently being undertaken on them by the ISSB.
10The IFRS Foundation held the World Standard Setters Conference 23-34 September 2024. The agenda included an update on the ISSB’s work, including connectivity.
11The ISSB released its September 2024 podcast, which covers key takeaways from the ISSB webinar on industry-based disclosures; external engagement updates on Australia, Brazil, New Zealand and Europe; and an update on adoption progress.
Jurisdictional developments
12The following paragraphs provide a summary of updates (since 20 August 2024) from other jurisdictions in relation to sustainability-related reporting.
13Appendix 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.
Australia
14On 9 September, the climate-related financial disclosures Bill passed through both Houses of Parliament in Australia, mandating reporting for all entities covered by the Corporations Act Chapter 2M (large listed and unlisted entities), large asset owners (>$5bn) and all entities subject to the National Greenhouse and Energy Reporting Act (NGER).
Implementation will be phased, with the new legislation applying to the first group of largest entities (>$500m revenue, >$1bn consolidated gross assets, >500 employees) for financial years beginning from 1 January 2025, meaning 31 December 2025 year ends will report first followed by 30 June 2026 year ends. There are three phased groups, and by July 2027 all large entities (>$50m revenue, >$25m consolidated gross assets, >100 employees) will be subject to requirements. However, those on the smaller end of the scale ($50-200m revenue, $25-500m consolidated gross assets, 100-250 employees) will only have to make disclosures if they face material climate-related risks or opportunities for the financial reporting period. If they do not, they must only disclose a statement to that effect.
Disclosures should follow the ASRS Standards, currently under development by the Australian Accounting Standards Board (AASB) in alignment with the ISSB Standards.
Brazil
15Brazilian regulator Comissão de Valores Mobiliários (CVM) announced a partnership with Carbon Disclosure Project (CDP) to support ISSB-aligned sustainability reporting in Brazil. Through the partnership, CDP will provide climate data on 1,100 Brazilian companies, aligned with IFRS S2 reporting, to CVM.
Chile
16On 28 August the Chilean Financial Market Commission (CMF) opened a consultation on using IFRS S1 and IFRS S2 as reference standards for requiring sustainability-related information. This would be an amendment to existing regulation on integrated sustainability and corporate governance disclosures which already align with the ISSB Standards. The consultation closed on 27 September 2024.
EU
17On 30 August EFRAG published the XBRL Taxonomy for the first set of ESRS Standards. This taxonomy will provide the basis for the European Securities and Market Authority (ESMA) to develop Regulatory Technical Standards for the digital tagging of sustainability disclosures.
18On 18 September EFRAG’s Sustainability Reporting Board (SRB) approved the Exposure Draft for a sector-specific sustainability reporting standard for the oil and gas industry. Entities will be required to apply the standard if they fall within the scope of CSRD and over 10% of their revenue falls within the oil and gas sector. Some members of the SRB have criticised the new standard due to its 151 new data points, which they have argued creates a reporting burden which may lead to entities preparing a further 100-200 pages of disclosures. However, the EFRAG’s Secretariat has clarified that 57% of these data points are directly aligned with existing standards and frameworks.
19Former Italian Prime Minister Mario Draghi criticised CSRD in a report on the future of European competitiveness as a ‘major source of regulatory burden’.
20The European Commission has opened infringement procedures against 17 member states for failing to transpose CSRD fully into national law by the 6 July deadline set. The states have been sent letters of formal notice and have two months to respond and complete the transposition.
Hong Kong
21On 16 September the Hong Kong Institute of Certified Public Accountants (HKICPA) published Exposure Drafts for HKFRS S1 and HKFRS S2, proposing full convergence with IFRS S1 and IFRS S2 respectively. The consultation will close on the 27th October.
Kenya
22On 18 September the Central Bank of Kenya released the draft of its Climate Risk Disclosure Framework for commercial banks. The framework is aligned with IFRS S2.
New Zealand
23On 24 September New Zealand’s External Reporting Board (XRB) announced that they are planning to open consultation on a document exploring options for transitional adjustments to their TCFD-aligned Aotearoa New Zealand Climate Standards, due to application challenges.
South Korea
24Consultation closed on the Korean Sustainability Disclosure Standards Exposure Draft on 31 August. The Korean Sustainability Disclosure Standards consist of two mandatory disclosure standards (KSSB 1and KSSB 2) and one non-mandatory disclosure standards (KSSB 101).
- Sustainability Disclosure Standard 1 (KSSB 1): General Requirements for Disclosure of Sustainability-related Financial Information (based on IFRS S1)
- Sustainability Disclosure Standard 2 (KSSB 2): Climate-related Disclosure (based on IFRS S2)
- Sustainability Disclosure Standard 101 (KSSB 101): Additional Disclosure aligned with Policy Objectives
Entities applying the Korean Sustainability Disclosure Standards must comply with the mandatory disclosure standards, KSSB 1 and KSSB 2, which are established based on IFRS Sustainability Disclosure Standard. KSSB 101 is a unique country-specific standard that allows companies to selectively disclose additional sustainability-related information as required by domestic laws or to meet the sustainability-related policy objectives.
Uganda
25Consultation closed on the Institute of Certified Public Accountants of Uganda’s (ICPAU’s) roadmap on the adoption of sustainability disclosure standards in Uganda on 23 August.
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 24 September 2024
| Jurisdiction | Current status | Both IFRS S1 & IFRS S2? | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| African Union: Kenya | Consultation open | IFRS S2 only | 2025-2027 | Banks |
| African Union: Morocco | Publicly committed | - | - | - |
| African Union: Nigeria | Consultation closed | Both | 2028-2030 | Listed & unlisted |
| African Union: Uganda | Consultation closed | Both | 2026-2028 | Listed |
| African Union: Zimbabwe | Publicly committed | - | - | - |
| Argentina | Publicly committed | - | - | - |
| Australia | Consultations closed | Both | 2025 | Listed & unlisted |
| Legislation passed | ||||
| Brazil | 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 | Consultation closed | 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 24 September 2024
| Jurisdiction | Current status | IFRS S1 & IFRS S2? | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| Bangladesh | Endorsed | Both | 2024-2027 | Banking & finance |
| Chile | Consultation open | Both | - | Listed |
| Costa Rica | Endorsed | Both | 2025-2026 | Listed & unlisted |
| Hong Kong | Consultation open | Both | 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 24 September 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 | NIS A-1 and NIS B-1 | Sustainability | 2025 | Unlisted |
| 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 |