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Sustainability's big reveal

Updated: May 13

by Fiona Donnelly


Your input is requested once again to more exposure drafts/consultations on new sustainability reporting disclosures, from two different issuers of sustainability reporting standards.


It’s getting very confusing though, so I give you a helicopter view on their context, and in two ways – easy-read or acronym-full (acronyms listed at the end):


For those who want the basics…

Sustainability reporting is going through a time of great change – they say you can take two steps backwards to go umpteen steps forward. Consider the two steps backwards as done.


Many organisations are merging or collaborating, and reflecting on core principles and structures of the sustainability frameworks. On top of which there’s further complications by variations to disclosures happening at, for example, market level, product level, and even individual professional level (eg fund managers (eek!)). Some disclosures are voluntary, and others mandatory, and thresholds for some becoming mandatory are changing.


It’s confusing, but there are several themes in common eg more governance and disclosures around climate-related risks and opportunities. Things are sure to become much clearer and hopefully more streamlined and better at relating to financial reporting soon.


For those in the thick of the technicalities…

Global accounting standards = IFRS Accounting Standards by IASB or GAAP, application being determined by market (ie IFRS is the basis for accounting standards in more than 140 markets).


The former has set up a sister arm in its foundation so that:


IFRS Foundation = IFRS Accounting Standards by IASB (per above) + IFRS Sustainability Disclosure Standards by ISSB


Where, in a nutshell:

  • ISSB = CDSB (by CDP) + VRF (which will incorporate IIRC + SASB by June 2022)

  • in March 2022, ISSB signed an agreement with GSSB (that delivers GRI) “to coordinate their work programmes and standard-setting activities”

  • ISSB has issued two exposure drafts on its first two Sustainability Disclosures standards – General Sustainability-related Disclosures and Climate-related Disclosures – follow the links below to contribute your views.


Location-specific twists…

Regional variations of note include in the EU, where various measures are being developed to support the achievement of its EU Green Deal (various initiatives to support the achievement of energy, emissions and other green and related targets). Sustainability reporting wise, this has brought about the proposal for a Corporate Sustainability Reporting Directive (CSRD, which is set to replace Non-Financial Reporting Directive) and envisaging the adoption of EU Sustainability Reporting Standards (ESRS). These standards would support the achievement of EU targets and related initiatives, and while also aligning with other international platforms like TCFD. Follow the link below to contribute your views.


(And regarding the fund managers, in particular… they are in the throes of changes regarding FMCC, SEC, SFDR among others. Be warned investees – fund managers’ demands of you could change.)




Interesting and sometimes gnarly points to note:

  • A common theme recurring throughout the above and more is alignment to TCFD (the governance and disclosures around climate-related risks and opportunities)

  • Materiality – most simply, there’s an ongoing reflection: is what’s material to an organisation determined by sustainability of the planet (ie with regard to a company’s impacts to the planet, and ideally with consideration of the limitations of the planet), or should it also consider the impact of ESG factors to a business?

  • Where things get disclosed – in annual reports, in filings, in separate sustainability reports and/or elsewhere or some hybrid of the above


Have your say by responding to the consultations.


And stay tuned... steps forward are on the horizon.


The links

By 29 July 2022, feedback to ISSB:

By 8 August 2022, feedback to European Financial Reporting Advisory Group on the first set of draft EU Sustainability Reporting Standards covering a full range of sustainability matters: environment, social, governance and cross-cutting standards.



The acronyms

IFRS = International Financial Reporting Standards; IASB = International Accounting Standards Board; GAAP = generally accepted accounting principles; ISSB = International Sustainability Standards Board; CDSB = Climate Disclosure Standards Board; CDP = new name for Carbon Disclosure Project; VRF = Value Reporting Foundation; IIRC = International Integrated Reporting Council; SASB = Sustainability Accounting Standards Board; GSSB = Global Sustainability Standards Board; GRI = Global Reporting Initiative; TCFD = Task Force on Climate-Related Financial Disclosures; FMCC = Fund Managers Code of Conduct issued by Securities and Futures Commission in Hong Kong; SEC = Securities and Exchange Commission of USA; SFDR = Sustainable Finance Disclosure Regulation of EU; ESG = environmental, social and governance



This article is for information only and is not intended to be a comprehensive review of sustainability reporting. Obtain direct and tailored advice before applying anything contained in this material to a specific scenario. For more information, contact Red Links. External links are included for readers’ convenience. The inclusion of these sources is neither an endorsement of that provider nor intended to provide readers with any assurance as to the completeness or accuracy of the particular material linked.



Cover Image Credit to Engin Akyurt on Pixabay