The technical strategy leader at the International Sustainability Standards Board (ISSB) has confirmed that the board will issue its first reporting standards by the end of June.

Speaking during a recent online outreach event, Rommie Johnson, ISSB technical strategy lead at the IFRS Foundation, told his audience: “What you may not know is that in the second quarter of this year, the ISSB will issue two standards based on those exposure drafts.”

His remarks came ahead of a crunch board meeting this week to fix an effective date for the board’s first two sustainability standards.

In papers prepared for that meeting, staff have proposed that the board sets an effective date of 1 January 2024 – with early application permitted if companies apply both standards together.

This means that the first sustainability reporting under the new standards will emerge in early 2025.

Jurisdictions are, however, free to set their own effective date for the new standards and choose whether to make them mandatory or not.

IFRS S1 sets out the global baseline in sustainability reporting while additional standards such as IFRS S2 address specific topics such as climate change – and additional topics in the future – to meet the needs of investors.

Potentially, the shift to a global baseline in sustainability reporting will change the nature of corporate reporting by blurring today’s sharp distinction between financial and non-financial reporting.

The finalisation of the two standards is hotly anticipated by users and preparers alike.

Richard Manley, chief sustainability officer and head of sustainable investing at CPP Investments, told the 31 January webcast that the new climate-change standard will be an important tool in holding boards to account for their responsibility to address the issue.

Manley is the chief sustainability officer and head of sustainable investment at the investment manager, which invests on behalf of the Canada Pension Plan.

He summed up climate-change reporting as “the vehicle that the board uses to demonstrate that it is appropriately overseeing and counselling the executives of the business and ensuring that their macro strategy […] is outlined, or is aligned with, the macro outlook for the economies that they’re operating in.”

Meanwhile, with a preparer perspective, Joe Allanson, executive vice-president, finance ESG, at Salesforce, told the webcast he was enthusiastic about the new standards and noted the growing relevance of climate change to the conversation his firm has with investors.

Salesforce is a California-based cloud software provider with a listing on the New York stock exchange.

He said: “Most recently, just a few months ago, we added climate into the agenda of our annual Investor Day with Wall Street industry analysts and other types of investors that were present.”

ISSB member Verity Chegar confirmed this was the same message the board had heard from investors.

She said: “We heard from investors that it’s useful information and that some information is more useful than no information. And so there’s value to investors in knowing where companies are starting from today.”

She went on to note that there was a “range of possibilities” when it came to meeting the requirement to disclose climate-change scenario analysis.

This might mean “sophisticated models using expensive data sets” at one end of the spectrum or “qualitative inputs and perhaps a narrative disclosure and description of a company’s evaluation of its resilience to those potential qualitative scenarios”.

She also noted the Task Force on Climate-related Financial Disclosures guidance on this topic.

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