KARACHI: The global accounting body, ACCA, says that the two new Exposure-Draft (ED) 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.
Investors use this information as it leads to operational changes in companies for more efficient and responsible allocation of capital.
Agreeing with the ED IFRS S1 – “General Requirements for Disclosure of Sustainability-related Financial Information”, the ACCA stated that: This will provide greater guidance about 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. This will improve comparability, while reducing cost and effort in reporting. ISSB should resist making disclosure requirement too voluminous.
Commenting on IFRS S2 Climate-related Disclosures, ACCA questions whether the SASB-derived industry-specific disclosure requirements fully reflect relevant disclosure topics and metrics in an emerging economy context. ACCA argues that until field-testing is done to more fully assess the international applicability of the industry specific requirements, they should not form a mandatory part of the standard, but rather take the place of application guidance.
Copyright Business Recorder, 2022
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