In Lahore, on June 26, 2023, the corporate reporting of sustainability-related information takes a significant step forward with the publication of two ground-breaking global standards.
ACCA welcomes the publication of two standards from ISSB (the International Sustainability Standards Board) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
Helen Brand, ACCA chief executive, said: ‘The launch of these first two global sustainability standards is an important and significant step forward in business reporting, providing a global baseline for comparable information on sustainability issues, which will help investors, financial markets and society more widely. The focus they provide will help drive the positive changes we need in the way businesses operate in the face of the threat of climate change.
‘ACCA will continue to support the ISSB’s important work. The influence of the accountancy profession – with its members working inside and advising businesses across the world – means it has a hugely important role to play in creating a better, more sustainable world that works for everyone. Consistent global standards are a key part of that picture and we look forward to playing our role in driving their success.’
The first corporate reports aligned with the new standards will be for 2024 reports published in 2025 with the picture varying by jurisdiction. In some jurisdictions, large and listed companies and public interest entities will be required to publish sustainability reports as early as 2025. And SMEs may well be required to provide sustainability reporting as part of value chain reporting.
Assad Hameed Khan, head of ACCA Pakistan, said: ‘These standards will make sustainability reporting more consistent, connected and meaningful. Importantly, they mark the early stages of the work accountancy professionals are achieving in driving systematic changes in sustainability reporting and its integration with financial reporting. They will drive wider changes too as sustainability reporting is likely to drive sustainability-led strategies, and there will be operational changes required to implement them and their reporting. Investors will see this as the start of providing the information they require to allocate capital more efficiently and responsibly.’
‘We look forward to continuing to work with the ISSB and other stakeholders in playing our part to build sustainability reporting capacity and tackle the climate emergency.’
Building on the framework for Integrated Reporting <IR>, IFRS S1 emphasizes the need for consistency and connection between financial statements and sustainability reporting. Those using the standards are expected to explain linkages in information and use consistent assumptions.
IFRS S2 incorporates The Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and guidance including the structure of governance, strategy, and risk management metrics/targets.
Companies that are already reporting by TCFD are well on their way to complying with ISSB.
ACCA has been closely involved with the creation of the standards and has worked with the ISSB to improve and refine the original draft standard. We also continue to work to develop the accountancy profession’s role in driving sustainability, for example through our ‘Accounting for a better world’ agenda for action, which seeks to drive and highlight the role of accountants in creating a fairer and more sustainable world.
Sustainability has been part of the ACCA Qualification since 2013, when Integrated Reporting <IR>, was added to the syllabus. In addition to sustainability reporting, the syllabus now includes topics such as social and environmental assurance, environmental tax, and internal control and management systems for sustainability and environmental reporting. We also offer a wide range of CPD courses in this area.
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