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Due process requirements for the International Sustainability Standards Board (ISSB)

From inception of its operations, the ISSB has been applying:

  • the due process specified in the IFRS Foundation Constitution;
  • the due process specified in the IFRS Foundation Due Process Handbook for the International Accounting Standards Board (IASB); and
  • any adaptions and additions to the requirements in the Due Process Handbook made by the IFRS Foundation Trustees’ Due Process Oversight Committee.

The Due Process Oversight Committee monitors the ISSB’s compliance with this due process. 

Due process requirements in the IFRS Foundation Constitution

Some due process requirements for the ISSB are specified in the IFRS Foundation Constitution (see sections 53–59 of the Constitution. The Trustees specified these requirements in October 2021 when they amended the Constitution to reflect the establishment of the ISSB.

Applicability of the due process requirements in the IFRS Foundation Due Process Handbook

The IFRS Foundation Due Process Handbook describes the due process requirements of the IASB and the IFRS Interpretations Committee relating to their standard-setting activities, the development of materials to support the consistent application of IFRS Accounting Standards, and the IFRS Accounting Taxonomy. The requirements reflect and further the due process specified in the Constitution for the IASB and the Interpretations Committee.

The Trustees’ committee responsible for overseeing the due process of the IASB, the ISSB and the Interpretations Committee—the Due Process Oversight Committee (DPOC)—last updated the Handbook in August 2020 before the establishment of the ISSB. Accordingly the Handbook makes no reference to the ISSB.

The DPOC will update the Handbook to reflect formally the establishment of the ISSB.

Before such time, the DPOC decided in March 2022 that the ISSB will apply the due process specified in the Handbook for the IASB for corresponding technical activities, in addition to the due process specified for the ISSB in the Constitution.

Adaptions to the requirements of the Due Process Handbook for the ISSB

In March 2022, the DPOC noted that adaptations and additions to the IASB’s due process might be required for specific aspects of the ISSB’s work. Any such adaptions and additions will be made by the DPOC and reported to stakeholders in the reports of its meeting on the IFRS Foundation website.

As a convenience for stakeholders, those adaptations and additions are summarised in the Appendix below.

Working with the IASB

The existing due process allows the IASB and the ISSB to establish connectivity in their respective Standards and, if considered appropriate, would allow the IASB and the ISSB to consider technical matters together or undertake a joint project and jointly issue a due process document.  For example, if the boards decided to issue an exposure draft jointly, each board would apply its balloting procedure separately in approving the exposure draft. Accordingly, a super majority of the IASB and a super majority of the ISSB would be required to issue the exposure draft.

Updating the Due Process Handbook

The DPOC is updating the Handbook to reflect formally the establishment of the ISSB.

Before the updated handbook is finalised, the DPOC decided in March 2022 that the ISSB will apply the due process specified in the Handbook for the IASB for corresponding technical activities, in addition to the due process specified for the ISSB in the Constitution.

Maintenance of the SASB standards

In October 2022 the DPOC discussed and approved the following process for the ISSB to maintain, evolve and enhance the SASB standards that do not form part of IFRS Sustainability Disclosure Standards. These standards have an important role because they are referenced as supporting materials in IFRS S1 General Requirements.

  • A group of three to five ISSB members will be established to develop recommendations for the ISSB relating to this work. The group will also develop drafts of the required exposure drafts of amendments to the SASB standards and, after considering the stakeholder feedback, drafts of the final amendments.
  • The ISSB will consider the recommendations of this group in ISSB meetings (which are public) and ratify the exposure drafts and, subsequently the final amendments prepared by the group.  Ratification will require the same level of support by ISSB members as is required for an amendment to an IFRS Sustainability Disclosure Standard. Exposure drafts of, and final amendments to, the SASB standards will be issued by the ISSB.
  • The comment period for the exposure drafts will be the same as for those related to IFRS Sustainability Disclosure Standards.

The DPOC also discussed two specific related matters relating to maintaining and enhancing the SASB standards:

  • the process for improving the international applicability of the SASB standards—the DPOC approved the ISSB issuing an exposure draft to request feedback on the proposed process and methodology for updating US-based references in the SASB standards for more internationally applicable references, rather than an exposure draft containing a full mark-up of the proposed amendments. Following consideration of the feedback to the exposure draft, the staff will make a draft of the amendments available on the IFRS Foundation website, consistently with the process described in paragraphs 3.31–3.33 of the Due Process Handbook, to allow stakeholders to review the amendments before the ISSB finalises them.
  • the process for amending the SASB standards to align them with the elements in the final version of Appendix B to the Climate-related Disclosures Standard that were originally drawn from the SASB standards. The DPOC agreed that no further public consultation on these amendments would be required given that they had been exposed for public comment as part of the Climate-related Disclosures Exposure Draft. (In future instances when the ISSB proposes incorporating elements from the SASB standards in IFRS Sustainability Disclosure Standards and in doing so amends those elements, the ISSB will include the consequential amendments to the corresponding SASB Standards as part of its Exposure Draft. This will enable those amendments to be made to the SASB Standards when the ISSB finalises the Exposure Draft to avoid multiple versions of materials.)

SASB Standards taxonomy due process

In March 2023 the DPOC considered and approved the following due process for updating the SASB Standards Taxonomy to enhance its international applicability.

  • Instead of publishing a proposed SASB Standards Taxonomy update (ie exposure draft), the ISSB will include a discussion on the proposed taxonomy modelling approach in the Methodology Exposure Draft. This aligns the approach to the consultation with that approved by the DPOC in October 2022 for approving the international applicability of the SASB Standards—ie consulting on the approach, rather than the detailed changes. The description of the approach will be developed by the staff, in consultation with the ISSB’s taxonomy consultative group and a group of ISSB members with expertise in the SASB Standards and the digital taxonomy, for ratification by the full ISSB. This is akin to the ratification process approved by the DPOC for the SASB Standards.
  • Feedback on the proposed modelling approach will be discussed in a public ISSB meeting.
  • Updates to the SASB Standards Taxonomy will then be finalised, subject to approval by the full ISSB.