The International Sustainability Standards Board (ISSB) is seeking feedback on its proposed methodology for improving the international applicability of the Sustainability Accounting Standards Board (SASB) standards.
The consultation will remain open for comments until 9 August.
Based on feedback, the ISSB aims to make targeted amendments to the SASB standards to ensure that references within them are internationally applicable.
The comments will specifically focus on the strategic direction and balance of the ISSB’s activities as well as the criteria for assessing which sustainability-related matters to prioritise—including topics, industries and activities.
It will also cover the scope and structure of potential new research and standard-setting projects.
Speaking during the ISSB’s April meeting round, vice chair Sue Lloyd said the consultation was “about the methodology” and not about whether people “agree or disagree with the particular disclosures set out in the balance of the SASB standards”.
Around 20% of the metrics included in the SASB standards refer to specific jurisdictional laws and regulations, which could lead to regional bias and undermine international applicability.
The SASB standards play a role in the ISSB’s general requirements standard (IFRS S1) by enabling companies to identify sustainability-related risks and opportunities and provide appropriate disclosures beyond climate, addressed by IFRS S2.
The ISSB aims to revise the metrics within the SASB Standards before IFRS S1 comes into effect in January 2024.
The proposals in the exposure draft do not apply to the ISSB’s separate climate change reporting standard, IFRS S-2.
Although that standard also makes references to the SASB literature, the board has opted to update the SASB metrics on a fast track in readiness for entities applying the standard from 1 January next year.
Currently, more than 2,700 companies in over 70 jurisdictions worldwide, including 72% of the S&P Global 1200 Index, apply the SASB Standards.
The ISSB took over governance of the SASB Standards after the consolidation of the Value Reporting Foundation into the IFRS Foundation last year, making the ISSB responsible for maintaining and enhancing the SASB standards.
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