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TAC Public Meeting December 2024 Paper 4: December General Reporting Update
AGENDA PAPER 4
Executive summary
| Date | 05 December 2024 |
|---|---|
| Paper reference | TAC-Update-December |
| Project | Monitoring |
| Topic | December General Reporting Update |
Objective of the paper
This paper provides key updates since the update paper provided at the November 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 26 November 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. It 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. It is for information purposes 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 14 November, the Chancellor set out the government's vision to grow and enhance the competitiveness of the UK's financial services sector in a speech at Mansion House. This included announcing, as part of the government's intentions to deliver a world-leading sustainable finance framework, to:
- publish draft legislation to boost investor confidence in sustainable companies by regulating ESG ratings providers,
- publish a consultation on the value case for a UK Green Taxonomy,
- commit to consult on economically significant companies disclosing information using future UK Sustainability Reporting Standards,
- launch a set of integrity principles for voluntary carbon and nature markets ahead of a consultation in 2025, and
- consult in the first half of 2025 on how best to take forward the manifesto commitment on transition plans in support of its ambition to become the global hub for transition finance.
4The Financial Conduct Authority (FCA) has published examples of good practice under its new Sustainability Disclosure Requirements (SDR) and investment labels regime. SDR will become mandatory for UK-domiciled funds on 2 December, but firms have been able to use the investment labels since the end of July 2024.
5The Department for Energy Security and Net Zero (DESNZ) published an Analysis Report on their Call for Evidence regarding Scope 3 Emissions in the UK Reporting Landscape. The Call for Evidence ran from 19 October 2023 to 14 December 2023 and collected 184 responses. Key findings include that 95% of respondents agreed with the ISSB's assessment of the value of Scope 3 emissions, namely that Scope 3 emissions can comprise a vast proportion of company emissions and that capturing data on them is crucial.
International Sustainability Standards Board
6The following paragraphs provide a summary of updates from the International Sustainability Standards Board (ISSB) since the last update paper presented at the November 2024 TAC meeting.
October 2024
7On 17 October, the International Business Council of the World Economic Forum announced its support for the establishment of a global baseline for sustainability information based on the ISSB Standards.
8On 31 October, the International Public Sector Accounting Standards Board (IPSASB) issued draft climate-related disclosure standards for governments in alignment with the ISSB framework. The IPSASB consultation is open for comments on the draft until February 28 2025.
9The ISSB issued updates to the SASB Standards Taxonomy, to reflect disclosure requirements arising from amendments to the SASB Standards (i.e. the amendments made in connection with the issuance of IFRS S2, and the amendments made as part of the ISSB's International Applicability of the SASB Standards project).
10The October episode of the ISSB Update podcast was released, covering insights into: the October ISSB meeting; the collaboration between the World Bank Group and the IFRS Foundation announced in September; the guide for voluntary application of the ISSB Standards also released in September; and the IFRS Foundation Integrated Thinking and Reporting Conference 2024 held in October.
November 2024
11On 12 November, the International Auditing and Assurance Standards Board (IAASB) released the International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. ISSA 5000 can be used with any sustainability reporting framework, including ISSB Standards.
12On 12 November, the IFRS Foundation published a progress report presented to the Financial Stability Board (FSB), detailing movement towards adoption of the ISSB standards globally as well as alignment with Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The report found that over 1000 companies have referenced the ISSB in reports, and 30 jurisdictions are making progress towards endorsing the ISSB Standards. Further analysis has been published by the IFRS Foundation into these 30 jurisdictions.
ISSB Chair Emmanuel Faber commented that investors are still not receiving the information they need to appropriately assess net price^1 climate and other sustainability-related risks and opportunities, with reference to the ISSB's monitoring of TCFD disclosures which showed that in 2023, out of 3814 companies, less than 3% reported in line with all 11 TCFD recommendations.
13On 12 and 14 November, the IFRS Sustainability Reference Group (SRG) met for the first time. The SRG will provide technical input to ISSB members and staff for research and standard-setting projects. Members offer representation across jurisdictions, preparers, users and industries.
14On 19 November, the IFRS Foundation published a guide to help companies identify sustainability-related risks and opportunities and what material information to provide. This will help companies to apply IFRS S1.
15On 20-21 November, the ISSB met in Beijing. Discussions covered the implications of amending IFRS S1 and IFRS S2 and the proposed criteria for considering amendments; and a preliminary assessment of existing disclosure standards and frameworks on human capital and on biodiversity, ecosystems and ecosystem services (BEES), as well as evidence of investor interest and effects on an entities prospect's regarding BEES. Note that the ISSB was not asked to make any decisions on these matters at this meeting.
16On 25 November the IFRS Foundation held episode 5 of its webinar series Perspectives of sustainability disclosure, summarising developments and considerations regarding the assurance of sustainability disclosures. Episode 6 will cover the latest findings on global progress towards adoption of the ISSB Standards (see paragraph 8) and will take place on 5 December 2024—registration is available online.
17The November episode of the ISSB Update podcast was released, covering insights into: the report into global progress towards adoption of the ISSB Standards (see paragraph 8), the guide to help identify sustainability-related risks and opportunities and disclose material information (see paragraph 14), and key takeaways from the November ISSB meeting (see paragraph 15).
Jurisdictional developments
18The following paragraphs provide a summary of updates (since 21 October 2024) from other jurisdictions in relation to sustainability-related reporting.
19Appendix 1 contains the summary tables of the different jurisdictional decisions relating to the IFRS Sustainability Disclosure Standards. The tables have been updated since the November 2024 TAC meeting to reflect the most recent developments.
Brazil
20On 29 October, Brazil's Securities and Exchange Commission (CVM) issued a resolution which will make reporting under the Comitê Brasileiro de Pronunciamentos de Sustentabilidade (CBPS) sustainability reporting standards mandatory for listed companies from January 2026. The standards are based on IFRS S1 and IFRS S2.
European Union
21On 24 October, the European Securities and Markets Authorities (ESMA) released its annual enforcement priorities for corporate reporting, including sustainability reporting, which will focus on compliance with CSRD's double materiality requirements and data quality. In relation to double materiality, ESMA may bring enforcement action against companies who do not adequately disclose their assessment methodologies, even if the assessment information is found not to be material.
22On 6 November, the European Financial Reporting Advisory Group (EFRAG) released draft Implementation Guidance for climate change mitigation plans under the Corporate Sustainability Reporting Directive (CSRD). The guidance aims to support companies in structuring transition plans for climate change mitigation, and how the guidance fits within the wider EU regulatory framework. The draft will form the basis for a consultation in 2025.
23The Spanish government have approved the transposition of CSRD into national law, following a formal notice made to them and 16 other member states by the European Commission in September.
24EFRAG have published working papers of its sustainability reporting standards for non-EU parent entities reporting under CSRD. The standards have been termed NESRS. Under CSRD, the European Commission is required to adopt NESRS reporting by 30 June 2026, for reporting beginning from the start of the 2028 financial year. The working papers are being discussed by EFRAG's Sustainability Reporting Technical Expert Group (TEG).
Kenya
25The Institute of Certified Public Accountants of Kenya (ICPAK) has published a roadmap setting out a plan for adopting the ISSB Standards. Under the proposed timeline, adoption would be mandatory for PIEs from 1 January 2027, for large enterprises from 2028, and for SMEs from 2029. The roadmap also lays out a timeline for limited assurance beginning one year after reporting.
Thailand
26The Securities and Exchange Commission of Thailand has published a roadmap for aligning their existing sustainability reporting requirements with the ISSB standards for listed companies. The proposed adoption timeline sees the 50 largest listed companies reporting under the new standards from 2026, the next 50 largest from 2027, and all listed companies from 2030. Limited assurance will also be required for the disclosure of greenhouse gas emissions. Consultation on the roadmap is currently open, until 19 December 2024.
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 (countries and regional bodies) summary as at 26 November 2024.
| Jurisdiction | Current status | Both IFRS S1 & IFRS S2? | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| African Union: Ghana | Endorsed | Both | 2027-2028 | Listed & unlisted |
| African Union: Kenya | Consultation open | Both | 2025-2027 | Banks |
| African Union: Morocco | Publicly committed | - | - | - |
| African Union: Nigeria | Endorsed | Both | 2028-2030 | Listed & unlisted |
| African Union: Tanzania | Endorsed | Both | 2025 | Listed & unlisted |
| African Union: Uganda | Consultation closed | Both | 2026-2028 | Listed |
| African Union: Zambia | Endorsed | Both | 2025 | Listed |
| African Union: Zimbabwe | Publicly committed | - | - | - |
| Australia | Consultations closed Legislation passed and subsequently signed into law | Both: IFRS S1-voluntary IFRS S2 - mandatory | 2025 | Listed & unlisted |
| Brazil | Endorsed | 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 |
| Mexico | Consultation closed | Both | 2026 | 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 26 November 2024.
| Jurisdiction | Current status | IFRS S1 & IFRS S2? | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| Bangladesh | Endorsed | Both | 2024-2027 | Banking & finance |
| Bolivia | Endorsed | Both | 2027 | Listed & unlisted |
| Chile | Consultation closed | Both | - | Listed |
| Costa Rica | Endorsed | Both | 2025-2026 | Listed & unlisted |
| Hong Kong | Consultation closed | 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 | Consultation closed | Both | 2026 | Listed & unlisted |
| Taiwan | Publicly committed | - | - | - |
| Thailand | Consultation open | Both | 2026 | Listed |
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 (countries and regional bodies) not publicly committed to adopting ISSB as at 26 November 2024.
| Jurisdiction | Current status | Topics | Reporting commencing from | Companies in scope |
|---|---|---|---|---|
| Argentina | Unconfirmed | - | - | - |
| 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 | - | - | - |
| Russia | Unconfirmed | - | - | - |
| Saudi Arabia | Unconfirmed | - | - | - |
| South Africa | Unconfirmed | - | - | - |
| United States of America (USA) | Climate disclosure rules by the US Securities and Exchange Commission (SEC) Californian climate-related disclosure regulations adopted (SB 253 and SB 261) | Climate | SEC: 2025-2033 (currently on hold) California: 2026 | Listed Listed & unlisted |