Sustainability
The International Sustainability Standards Board (ISSB) has pledged over the next two years to help companies transition to making IFRS S1 and IFRS S2 declarations rather than developing additional sustainability reporting standards. It will focus on ‘the provision of high-quality, decision-useful information’, including help in measuring greenhouse gas emissions.
The ISSB’s new two-year plan also stresses work with the Global Reporting Initiative (GRI) on ensuring that its standards have ‘full interoperability‘ with the ISSB, to ‘jointly identify and align common disclosures’.
The GRI has launched an alignment review service of GRI-ESRS (European Sustainability Reporting Standards) disclosures, enabling GRI reporters to receive detailed feedback on their existing reporting and how it aligns with ESRS. Reporters will receive advice on potential restructuring of reports to mesh with ESRS mandatory structures.
The GRI has released an updated online database to improve business reporting on reaching UN Sustainable Development Goals (SDGs). The online free database helps potential SDG disclosures, based on recognised international frameworks and standards, such as the GRI; new research options, easing access and comparability of information; and regular revisions.
The GRI is also consulting on its planned new sustainability reporting taxonomy, designed to help companies organise and classify disclosures and standards-related information. XBRL and sustainability experts are encouraged to respond, said the GRI.
The IFRS Foundation has signed a memorandum of understanding with the World Bank’s International Finance Corporation on creating a strategic partnership to improve sustainability and climate reporting in emerging markets and developing economies. This includes developing toolkits and research publications, while staging training programmes.
Financial instruments
The International Accounting Standards Board (IASB) has concluded a post-implementation review of impairment requirements in IFRS 9, Financial Instruments – Impairment. The IASB concluded that the requirements have aided timely and useful recognition of credit losses. Now, the IASB will explore whether to clarify requirements for modification, derecognition and write-off of financial instruments, and related effects on recognition of expected credit losses.
Audit
The International Auditing and Assurance Standards Board has released new supplemental guidance on auditor reporting, relating to the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE). It advises on modifying an auditor’s report, information on using emphasis of matter and reporting material uncertainty related to going concern, for example.
Strategy
The International Federation of Accountants (IFAC) has released a Professional Accountancy Organisation Strategy Planning Toolkit, aimed at helping these groups develop a coherent strategy and operating model. This includes guidance on setting objectives and choosing relevant key performance indicators.
Reporting
The European Financial Reporting Action Group (EFRAG) has released an advisory paper, ‘Connectivity considerations and boundaries of different Annual Report sections’, describing conceptual foundations, categories and benefits of connectivity when making mandatory sustainability reports, such as ESRS and ISSB. It analyses reporting boundaries across different annual report sections, identifying grey areas regarding the location of information.
The Taskforce on Nature-related Financial Disclosures (TNFD) and EFRAG have jointly advised on how ESRS and the TNFD’s recommended disclosures and metrics have significant commonality. It highlights how the TNFD and ESRS recommend disclosure of nature-related impacts, risks and opportunities, with ESRS based on double materiality external impact reporting. It also highlights joint use of the TNFD’s LEAP approach for identifying and assessing nature-related issues.
More information
Visit ACCA’s Accounting for a better world hub for articles and resources on sustainable business, and read ACCA’s guide to preparing for sustainability reporting.
