A lot of everything around the world it seems, but on the corporate reporting side…
The International Sustainability Standards Board (ISSB) is expected to release exposure draft standards or guidance for two key projects they’ve been working on since last year: biodiversity (nature) and human capital, possibly by the third quarter. And the ISSB will continue to encourage the 140 countries that adhere to the IFRS Accounting Standards to adopt the existing ISSB standards as well.
The Global Reporting Initiative (GRI) is expected to introduce new sector and topic standards, and new interoperability guidance with the ISSB. This guidance aims to align their common disclosures, among other areas. Hopefully, it will also address how to deal with the differences between the GRI’s impact materiality and the ISSB’s financial materiality (interestingly, will they reconcile these approaches or simply refer to the useful approach set out in the European Sustainability Reporting Standards (ESRS), which comprehensively cover double materiality addressing financial and impact materiality?)
Professor Mervyn King likes to explain sustainability reporting as two sides of a coin: the one being the ISSB’s focus on sustainability-related financial risks and opportunities, and the other being the GRI’s focus on the company’s impacts on society and the environment. For companies, comprehensive sustainability reporting means adopting both of these standards and achieving double materiality.
This new era of detailed sustainability reporting will see more and more companies, either voluntarily or by regulation, disclose their risks, opportunities and impacts on society, economy and the environment. This shift will improve accountability and foster greater trust between corporations and their stakeholders in meeting the increased need for transparency.
And the integrated report, using the Integrated Reporting Framework, continues to be the report that brings all the information together – showing the business as a holistic whole addressing strategy, external environment, stakeholders’ needs and interests, risks and opportunities, governance and performance. In compiling the integrated report, relevant information is picked up from the detailed financial statements and the detailed sustainability reporting.
This year, the IRC of SA will again release an Information Paper on a topic aimed at helping companies achieve high-quality corporate reporting.