09 May ISSB and EU strengthen sustainability reporting with new guidance measures
The International Financial Reporting Standards (IFRS) Foundation and the European Financial Reporting Advisory Group (EFRAG) have partnered and released new measures enhancing sustainability reporting processes to make reporting more affordable and resource-efficient. The new guidance represents the collaboration efforts between the ISSB IFRS Sustainability Disclosure Standards (ISSB Standards) and the European Sustainability Reporting Standards (ESRS).
In short, the document intends to prioritise the challenges companies face when following multiple reporting frameworks, such as fragmentation, complexity and duplication. Through a streamlined approach, the plan empowers businesses to disclose sustainability information that aligns with the ISSB Standards and ESRS.
A recent study showed that global ESG regulations have increased by over 150% in the last decade, with 1255 ESG regulations launched since 2011 worldwide. In this study, over 50% of UK sustainability professionals said reporting requirements are too challenging.
Sue Lloyd, the vice chair of ISSB, explains that they recognise the need to create efficiencies for business or choose to apply both ISSB Standards and ESRS.
As measures shift to adopt ISSB Standards, we expect this guidance will provide practical support for businesses needing to understand how to apply the requirements of both ISSB and ESRS.
The guidance provides comprehensive insights into how businesses can apply both standards and includes a detailed analysis of climate-associated disclosures. According to both groups, by streamlining the challenges companies face, businesses can harness these measures to improve transparency, comparability and accountability in their reporting processes. Furthermore, the guide intends to support better collection, governance and control of valuable data for businesses in the long term.
Patrick de Cambourg, the chair of the EFRAG sustainability board, explains that through the combined efforts, they are happy to release this practical guide highlighting how ESRS embeds the baseline approach created by the ISSB. Cambourg highlights that it demonstrates EFRAG’s commitment to the convergence of sustainability-related disclosures for climate and other sustainability areas.
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