The International Sustainability Standards Board (ISSB) has postponed a formal decision regarding amendments to its IFRS S1 standard, reports IPE.
IFRS S1 outlines the requirements for disclosing information about an entity’s sustainability-related risks and opportunities.
The latest decision aims to enhance connectivity with the International Accounting Standards Board’s (IASB) forthcoming revisions to the Management Commentary Practice Statement.
The delay will provide staff with additional time to incorporate feedback from board members and refine their proposals.
ISSB vice-chair Sue Lloyd said: “My recommendation is, we take the feedback we’ve heard today – the positive signal in terms of direction – but don’t formalise it beyond that, and we come back to it again at a later board meeting.”
The staff had suggested amending IFRS S1 to mandate that entities applying the revised Management Commentary Practice Statement include sustainability-related financial disclosures, as specified by ISSB standards, within their management commentary.
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By GlobalDataThis amendment was intended to clarify the interaction between ISSB standards and IASB’s revised management commentary.
It is also expected to not apply in situations where there is no obligation to provide a management commentary.
Sue Lloyd noted that any amendments to IFRS S1 would only be considered after the IASB has finalised its Management Commentary project.
She also mentioned that there is currently no commitment to an effective date for the changes, which allows the board to minimise potential disruption for stakeholders and jurisdictions adopting ISSB standards.
ISSB chair Emmanuel Faber stated that the proposal fulfilled the obligation for the boards to collaborate, emphasising its foundational importance and the potential to create synergies with the work of the IASB.
However, the board’s second vice-chair Jingdong Hua expressed his inability to support the specific proposal.
He stated that “there needs to be a very high bar” before the board changes its standards, such as identifying fatal flaws or responding to compelling calls from stakeholders.
The discussion also addressed whether ISSB standards are ‘location agnostic’ regarding the inclusion of sustainability disclosures.
Last month, the Securities and Exchange Commission of Pakistan (SECP) revealed that it is assessing the implementation of the IFRS Sustainability Disclosure Standards in Pakistan.
The Institute of Chartered Accountants of Pakistan has recommended adopting IFRS Sustainability Disclosure Standards, which include IFRS-S1 and IFRS-S2.
