The Sustainability Accounting Standards Board (SASB) will formally hand over responsibility for its sustainability metrics rulebook to the International Financial Reporting Standards (IFRS) Foundation in June.
“Ownership of the SASB Standards will transition to the IFRS Foundation in June, as will existing projects such as work to internationalise metrics following market feedback,” the SASB’s parent body the Value Reporting Foundation (VRF) said in a statement.
The VRF added that the full suite of SASB standards will “ultimately transition into IFRS Sustainability Disclosure Standards” under the International Sustainability Standards Board’s (ISSB) due process.
Although the move is expected to have little impact in the short term, the IFRS Foundation has signalled it plans to issue exposure drafts as a follow-up to its prototype reporting standards dealing with climate change and general sustainability disclosure requirements in the second quarter of this year.
The prototypes are the result of preliminary work by the IFRS Foundation’s Technical Readiness Working Group and draw on the work of the Task Force on Climate-related Financial Disclosures, the Integrated Reporting Framework and existing SASB Standards.
The IFRS Foundation announced the launch of the ISSB in November 2021.
Its long-term vision is to establish a one-stop-shop for financial and sustainability reporting that allows companies to “provide a comprehensive view of performance and prospects to the financial markets.”
Although the decision to form the ISSB has met widespread support, the move has not been without its critics.
Professor Carol Adams from Durham University Business School told IPE: “The IFRS Foundation needs to focus on ensuring that risks that could affect asset valuations and liabilities are disclosed.
“The SASB Standards don’t do this, and they don’t provide report users with information on management approach, governance oversight and incorporation of sustainable development issues into strategy in the way that GRI Standards do.”
Critics also complain that the ISSB’s approach to sustainability reporting risks serving the interests of large asset managers and not those of wider society.
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