ISSB opens consultation on implementation of SASB standards
The International Sustainability Standards Board (ISSB) is seeking feedback on its proposed methodology for enhancing the international applicability of the SASB Standards.
The ISSB assumed governance of the SASB Standards following the consolidation of the Value Reporting Foundation into the IFRS Foundation last year.
This means that, in addition to setting the ISSB Standards, the ISSB is responsible for the maintenance and enhancement of the SASB Standards.
The SASB Standards will underpin the ISSB’s general requirements standard (IFRS S1), looking to help companies identify sustainability-related risks and opportunities and provide appropriate disclosures beyond climate, something which will be addressed by IFRS S2.
The ISSB’s objective is to revise the metrics within the SASB Standards, based on the outcomes of the consultation, prior to IFRS S1 coming into effect in January 2024.
Around 20% of the SASB Standard metric incorporate references to specific jurisdictional laws and regulations. According to the ISSB, revising these references following consultation will help improve international applicability and remove regional bias.
Criticisms of a perceived dearth in both the quality and quantity of ESG data and rates of reporting have been a bugbear for the concept almost since the inception of responsible investing as a concept. The incoming ISSB standards have the potential to be the overarching standard, and serve as a cornerstone of an area of reporting that is still in its infancy.
Jeffrey Hales, chair of the ISSB’s SASB Standards Board Advisor Group, said: “The increase in companies around the world voluntarily applying the SASB Standards in response to investor demand sends a strong signal about the information investors need. The ISSB is committed to maintaining and enhancing the SASB Standards so that they continue to be effective in supporting companies to deliver industry-based sustainability disclosures to investors.
“Through this project, we hope to make it easier for companies to apply the SASB Standards regardless of where they operate and to help companies applying IFRS S1 produce comparable and decision-useful disclosures.”
The SASB Standards are already applied by 2,700 companies in more than 70 jurisdictions around the world, including 72% of the S&P Global 1200 Index.
The consultation is open for comments, preferably by online survey, until Wednesday 9 August of this year.
In March this year, vice chair Sue Lloyd spoke to Net Zero Investor on why the ISSB adds value.