This article introduces the application of ISSB standards in global jurisdictions in 2024.
The International Sustainability Standards Board (ISSB) has launched IFRS S1 and IFRS S2. The International Organization of Securities Commissions (IOSCO) believes that each jurisdiction should apply ISSB standards based on practical experience to achieve consistent and comparable information disclosure.
Application of ISSB Standards in Global Jurisdictions
The Financial Stability Board (FSB) conducts a survey of its members in 2024 to understand the application of ISSB standards. Most respondents are considering developing sustainable disclosure policies such as climate disclosure based on ISSB standards. Their actions are as follows:
China: In May 2024, the Ministry of Finance of China released a Basic Standard Exposure Draft based on the ISSB standard, planning to launch climate information disclosure standards in 2027 and establish a sustainable disclosure standard system by 2030.
Hong Kong: In September 2024, the Hong Kong Institute of Certified Public Accountants (HKICPA) released the Exposure Draft HKFRS S1 General Requirements for Disclosure of Sustainability related Financial Information and the Exposure Draft HKFRS S2 Climate related Disclosures based on the ISSB standard, and plans to implement the climate disclosure standards in August 2025.
Singapore: In September 2024, the Singapore Exchange released a document guiding listed companies to incorporate ISSB standards into their sustainability reporting regime. The Singapore Accounting and Corporate Regulatory Authority plans to revise the Company Act to include sustainable disclosure requirements.
Korea: In April 2024, the Korea Sustainability Standard Board, a subsidiary of the Korea Accounting Institute, released a draft ESG disclosure standard based on the ISSB standard and solicited opinions from the market. The consultation period ends in August 2024.
Japan: In March 2024, the Sustainability Standards Board of Japan released a draft of sustainable information disclosure based on the ISSB standard and solicited opinions. The sustainable information disclosure standards will be officially released in March 2025.
Switzerland: Switzerland reviews the Regulation on Climate related Disclosures based on ISSB standards and European Sustainability Reporting Standards (ESRS), without relying on the Taskforce on Climate-related Financial Disclosures (TCFD).
United States: Securities and Exchange Commission (SEC) discussed IFRS S1 and IFRS S2 in the Climate related Disclosure Rules and considered whether issuers can comply with climate related disclosure rules based on the information disclosure rules of their jurisdictions. The US Securities and Exchange Commission plans to first observe the application of ISSB standards and then confirm whether the standards can provide appropriate sustainable information for investors.
Canada: In March 2024, the Office of the Superintending of Financial Institutions in Canada updated its climate related disclosure expectations for regulated financial institutions to include IFRS S2 in climate related disclosures. In March 2024, the Canadian Securities Administrators revised the Canadian Sustainability Disclosure Standards (CSDS) CSDS 1 and CSDS 2 consultation documents proposed by the Canadian Sustainability Standards Board (CSSB) to align with the public interest. The Canadian Securities Administrators plans to solicit market opinions and develop climate disclosure requirements based on CSSB standards.
UK: The Department for Business and Trade has initiated the assessment process for IFRS S1 and IFRS S2, based on the voluntary implementation of sustainability reporting standards to be released in the first quarter of 2025.
EU: In May 2024, the European Commission and the European Financial Reporting Advisory Group (EFRAG), in collaboration with the ISSB, released the ESRS-ISSB interoperability guidelines, confirming that companies that comply with one sustainable information disclosure standard can comply with another standard through limited additional disclosures.
Australia: In October last year, the Australian Accounting Standards Board (AASB) released a draft of the Australian Sustainability Reporting Standards (ASRS), which require large businesses and asset owners to disclose information based on the ISSB Standards. In August 2024, the Australian Senate passed the climate disclosures act, which will take effect in January 2025.
Reference:
Achieving Consistent and Comparable Climate-related Disclosures: 2024 Progress Report
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