In August 2023, the Institute’s Standard Setting Department responded to the International Sustainability Standards Board’s (ISSB) Request for Information (RFI) on its Consultation on Agenda Priorities. The RFI sought views on the strategic direction and balance of the ISSB’s activities; the suitability of criteria for assessing which sustainability-related matters to prioritize and add to the ISSB’s work plan; and a proposed list of new research and standard-setting projects that could be added to the ISSB’s work plan. This article highlights our response to the RFI. The full response is available on our website.

Strategic direction and balance of the ISSB’s activities

We emphasized the importance of the successful implementation of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures for the credibility and effectiveness of the ISSB and its future work. We noted that companies, particularly small- and medium-sized enterprises (SMEs), may face challenges in adopting the new standards. Examples of potential application challenges include conducting climate scenario analyses, data collection and calculation for scope 3 emission, determination of materiality, as well as the assessment of current and anticipated financial effects.

To address these challenges, we recommended that the ISSB prioritize providing practical guidance and capacity building support to help companies, in particular SMEs, implement the standards. This could be done through the sharing of best practices and adoption status in each jurisdiction to promote consistent application of the standards. In addition, the ISSB should work closely with regulators and national standard setters to solicit feedback on implementation challenges.

Criteria for assessing the priority of sustainability-related matters

We noted that the criteria should focus not only on matters that are currently important but also on emerging issues that may become relevant to investors in the foreseeable future, considering the time needed to develop a sustainability disclosure standard. In addition, we suggested expanding one of the criteria to include matters that are not currently being disclosed (i.e. non-disclosure as opposed to deficiency in disclosure).

New research and standard-setting projects that could be added to the ISSB’s work plan

We considered that the ISSB should prioritize the “biodiversity, ecosystems and ecosystem services” project. This is due to the relative maturity of the relevant concepts, growing investor interest in the topic, the risks stemming from biodiversity loss and its connection to climate change. However, we emphasized that biodiversity-related disclosures should not be pursued until solid foundations are in place to support them, such as capacity building.

There were mixed views among our respondents regarding the next highest priority item. On the one hand, investors considered human capital topics such as fair labour practices, workplace safety and employee engagement important. Furthermore, given human capital and human rights matters are interconnected with each other and overlap to a certain extent, some respondents considered human capital and/or human rights should be the next highest priority item.

On the other hand, there is a strong demand for integration in reporting as it provides a more transparent and holistic view of a company’s performance and value creation. By combining financial and non-financial information, integration in reporting gives a more complete picture of a company’s sustainability and financial performance. Therefore, some respondents considered this topic to be more important than human capital and/or human rights. In addition, some respondents considered it difficult for the ISSB to proceed with the project on human rights, as there are differing definitions and views of human rights-related topics across jurisdictions. This could be resource-intensive for the ISSB and so some respondents suggested that integration in reporting should be the next highest priority item.

In this regard, we noted that IFRS S1 and IFRS S2 already requires entities to report on “connected information” which could ease the urgent demand for integration in reporting to a certain extent. This would in turn allow more flexibility for the ISSB to work on other topics such as human capital and human rights.


This article was contributed by Anthony Wong, Associate Director of the Institute’s Standard Setting Department. Visit our “What’s new” webpage for our latest publications, and follow us on LinkedIn for upcoming activities.

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