New sustainability disclosure standards from the International Sustainability Standards Board are set to become effective in January 2024, the ISSB disclosed in February 2023.
The ISSB has four objectives, according to a Q&A from the organization.
- Develop standards for a global baseline of sustainability disclosures;
- meet the information needs of investors;
- enable companies to provide comprehensive sustainability information to global capital markets; and
- facilitate interoperability with disclosures that are jurisdiction-specific and/or aimed at broader stakeholder groups.
The Wall Street Journal pointed to these additional key points about the ISSB standards effort.
- ISSB is backed by the Group of 20 advanced and developing economies and is part of the International Financial Reporting Standards (IFRS) Foundation, an accounting body overseeing financial reporting such as corporate earnings.
- ISSB standards require companies to report emissions from their direct operations, energy purchases and from their value chains, including suppliers.
- Still, the ISSB gave companies an exemption of one year for reporting emissions from their value chains—known as Scope 3 emissions—due to the challenge of gathering data from suppliers.
- More than 150 countries follow the IFRS -- and the group will promote its sustainability disclosure standards to market regulators. Finance ministers of more than 40 countries have said they welcome the ISSB’s work, including the U.S., U.K. and Germany.
ISSB Sustainability Disclosure Standards and IT Consulting Firms: What It All Means
Publicly held technology firms -- along with technology partners that work with publicly held customers -- should ramp up on the ISSB disclosure standards for a range of regions. For instance, the standards are "designed to be cost-effective and have been developed with efficiency in mind, to help companies report what is needed by investors across markets globally," the IFRS noted in a Q&A about the ISSB disclosure standards.
