![Fast moving](https://integratedreportingsa.org/ircsa/wp-content/uploads/2022/05/Fast-moving.png)
By Leigh Roberts CA(SA)
Things are moving quickly in international corporate reporting … and there’s more change afoot.
On 31 March 2022, the International Sustainability Standards Board (ISSB) released its first two IFRS Sustainability Disclosure Standards Exposure Drafts – a general requirements draft standard and a climate draft standard. (The link to these is on the home page of this website.)
On 29 April 2022, the European Union’s EFRAG released the European Sustainability Reporting Standards (ESRS) Exposure Drafts. The range of draft standards offer general principles and a general standard, as well as specific ESG topics (including climate). (The link to these is on the home page of this website.)
The two sets of standards have a different focus. The ISSB draft standards are designed to meet the information needs of investors and call for the disclosure of material information about all of a company’s sustainability-related risks and opportunities.
The ESRS draft standards are wider and call for the disclosure of material information about all the sustainability-related impacts, risks and opportunities of a company.
The word that pops out between the two is of course “impacts”. A single word that means oh so much. The enlightened approach of the EU wants companies to disclose their impacts (effects/ outcomes) on society and the environment over the short, medium and long term.
And who on earth would not want to know such information? Surely investors want this information too (except maybe the short-term traders, although they could go short on learning of a negative impact and the reputational harm it could impose on a company). Such information is surely relevant in assessing the longevity of their investment in a connected world.
From the ISSB we seem to just be getting more of the same financial accounting stuff…. But the world is moving on from the historical singular focus on financial capital to embracing, respecting and being responsible for the six capitals that a company relies on for its success and longevity. The saving grace for this rather old-fashioned view is their building blocks approach which allows individual countries (who adopt their standards) to add-on their own jurisdictional reporting requirements, including any multi-stakeholder information needs. Ummm….. is this a side-wards nod to the importance of reporting on impacts?
• This blog reflects Leigh’s personal views and should not be read as the IRC’s view.