AICPA & CIMA comment on draft IFRS Sustainability Disclosure Standards
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AICPA & CIMA comment on draft IFRS Sustainability Disclosure Standards

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At COP26 in November 2021 the IFRS Foundation announced the formation of the International Sustainability Standards Board (ISSB) with the objective to deliver a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ sustainability-related risks and opportunities to help them make informed decisions. AICPA & CIMA, the Centre for Audit Quality (CAQ) and the Value Reporting Foundation debriefed the COP26 outcomes in a 90-minute webcast on November 15, 2021. If you missed it, you have the opportunity to watch the webcast.

On March 31, 2022, the ISSB published the Exposure Drafts IFRS S1 General Requirements for Disclosure of Sustainability-related Information and IFRS S2 Climate-related Disclosures: one sets out general sustainability-related disclosure requirements, and the other specifies climate-related disclosure requirements. See also the AICPA’s joint webcast with the CAQ and the Value Reporting Foundation on New developments in sustainability standard-setting and SEC rulemaking.

The AICPA & CIMA response to the ISSB’s invitation to comment on the draft sustainability disclosure standards highlights the following:

  • Support for a scope that parallels the reporting entity for financial statement disclosures to enable connectivity between sustainability and traditional financial information, referencing the International Integrated Reporting Framework

  • The potential need for more specific information on how materiality of sustainability information is to be dealt with as well as more guidance about what “significant” means to better inform what should be reported

  • The need for sound risk management procedures in place to monitor, assess and act on any risks as they arise

  • The importance of alignment with existing standards and frameworks and one global sustainability taxonomy that is consistent across jurisdictions

  • The necessary components for contributing to the trust in, and effectiveness of, our financial reporting system, including assurance provided by licensed professionals who are held accountable to core values of integrity, objectivity, and independence

  • Support for a degree of flexibility with respect to disclosure requirements (e.g., Scope 3 greenhouse gas emissions) in the forms of exemptions in appropriate situations, a trial period to develop best practice in adhering to the standards and recognition of good-faith efforts to comply, and

  • The role of management accountancy in sustainability reporting

Read the comment letter for deeper insights on each of the matters outlined above.

Download the AICPA & CIMA Response to Consultation Request on Draft Sustainability Disclosure Standards

File name: ISSB Standards AICPACIMA Response26July2022

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