Sustainability Assembled

Table of contents

Greenwashing Risk
Regulatory Updates
ESG Reporting Standards
Nature-related Risks and Opportunities
Spotlight on Transition

ESG Reporting Standards

This past quarter we have continued to see the development of research projects, tools and guidance.

These include:

  • confirmation by the International Sustainability Standards Board’s (ISSB) that it will add two research and standard-setting projects to its two year plan: (1) risks and opportunities associated with biodiversity, ecosystems and ecosystem services; and (2) risks and opportunities associated with human capital. Each research project will focus on the information needs of investors when assessing how these risks and opportunities may affect a company’s prospects. The ISSB intend to build on relevant existing materials (including SASB Standards, CDSB Framework guidance and TNFD) and promote interoperability between ISSB disclosures and other relevant standards and frameworks; and
  • EFRAG and the IFRS Foundation have published an interoperability guidance relating to the ESRS and the IFRS Sustainability Disclosure Standards (ISSB Standards). The guidance sets out alignment of disclosure requirements and information between the two standards with the aim of reducing complexity, fragmentation and duplication and enhancing efficient compliance with both sets of standards.

Commentary

According to the IFRS Foundation, jurisdictions representing more than 50 per cent. of the world’s GDP have decided to use or are taking steps to align their sustainability disclosure standards with those of the ISSB. This is a significant step towards establishing a harmonised baseline of reporting standards since IOSCO announced its endorsement of the ISSB standards last year. In May 2024, IFRS Foundation released a guide – the Inaugural Jurisdictional Guide for the adoption or other use of ISSB Standards. Market participants are encouraged to familiarise themselves with the various tools, guides and educational materials summarised in the Regulatory Implementation Programme. Additional analysis and information on the use of ESG standards in loan products can be found in Horizons01.