The four pillars of the new IFRS Sustainability Standards

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The four pillars of the new IFRS Sustainability Standards

Apr 24, 2024 | IFRS, Sustainability

The Trustees of the IFRS Foundation announced the formation of the International Sustainability Standards Board (ISSB) on 3 November 2021 at COP26 in Glasgow, following strong market demand for its establishment.

The ISSB is developing—in the public interest—standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets.

The ISSB has international support and is backed by the G7, G20, the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board, amongst others. The Standards issued by the ISSB will help combat the challenges of companies “greenwashing”, meaning stakeholders will be able to make better informed decisions with confidence.

The two IFRS Sustainability Standards are IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.

The two standards have four pillars in common illustrated below. For S1, these are sustainability-related while for S2 these are climate-related.

In relation to IFRS S2, there are two classes of risks namely:

Written by KC Rottok Chesaina, Chief IFRS Officer at Financial Minds. For IFRS training and consulting, email us on ask@fineminds.co.za 

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