KARACHI: ACCA says that the draft standards from the International Sustainability Standards Board (ISSB) are urgently needed to provide a consistent global base line for companies reporting on sustainability-related financial information.
While welcoming the two exposure drafts (EDs) ACCA notes that it is imperative that reporting drives the necessary systematic change in sustainability reporting and that operational changes take place in companies and that investors use the information provided to allocate capital more efficiently and responsibly.
Commenting on the ISSB’s exposure draft (ED) IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, ACCA is calling for a clear definition of the meaning of sustainability-related financial information. The global accountancy body is also calling for standard setters to give greater guidance on how entities will determine materiality when reporting on sustainability issues.
ACCA also warns that proposed disclosures about risks and opportunities emerging from companies’ supply chains, including Scope 3 emissions, will present new disclosure challenges for many companies as will working out how to provide forward looking information.
Sharon Machado, head of Sustainable Business, ACCA says: ‘The ED does not define what is ‘sustainability-related’. As a result, the breadth and scope of the risks and opportunities that need to be considered and disclosed is left to the judgement of the preparing companies, to the detriment of consistent application, comparability, as well as cost and effort in reporting.
Sharon says we would urge the ISSB to provide a clearer indication, both in the standard and through illustrative examples, as to what sustainability might cover.
Copyright Business Recorder, 2022