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The International Sustainability Standards Board (ISSB) is finalising general requirements for an entity to disclose sustainability-related financial information.

In March 2022 the ISSB published Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, proposing overall requirements for an entity to disclose sustainability-related financial information about its sustainability-related risks and opportunities. The Exposure Draft also proposed that an entity provide the market with a complete set of sustainability-related financial disclosures.

The ISSB redeliberated the proposals after considering the feedback on the Exposure Draft, and expects to issue an IFRS Sustainability Disclosure Standard around the end of Q2 2023.

Supplementary ISSB Update April 2023

The ISSB met on 4 April 2023 to discuss further the transition reliefs to be provided in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.

The ISSB tentatively decided to introduce a transition relief in IFRS S1 that would allow an entity to report on only climate-related risks and opportunities (as set out in IFRS S2 Climate-related Disclosures) in the first year it applies IFRS S1 and IFRS S2. The entity would be required to provide information about its other sustainability-related risks and opportunities in the second year it applies the two Standards.

This one-year transition relief would not change the effective date of IFRS S1. The ISSB tentatively decided in February 2023 to require that IFRS S1 be effective for annual reporting periods beginning on or after 1 January 2024. However, for an entity applying this transition relief in the first year it applies IFRS S1, the requirements in IFRS S1 would apply only insofar as they relate to the disclosure of climate-related financial information.

This transition relief would have no effect on the application of or requirements in IFRS S2.

The ISSB also tentatively decided that if an entity uses this transition relief, it:

  1. would be required to disclose that fact.
  2. could extend the previously agreed transition relief in IFRS S1 related to disclosing comparative information such that the entity would not be required to disclose comparative information related to its other sustainability-related financial information in the first year it discloses that information. For the avoidance of doubt, comparative information for climate-related financial information would be required in the second year.

All 14 ISSB members agreed with these decisions.

Next milestone

IFRS Sustainability Disclosure Standard