Regulatory updates

Regulatory update

Updates from ISSB

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In June 2023, the International Sustainability Standards Board (ISSB) had issued the first two IFRS Sustainability Disclosure Standards – IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2, Climate-related Disclosures, which come into effect from January 2024 onwards. In order to facilitate smooth implementation of the standards by the companies, on 14 December 2023, ISSB has released certain important resources. These include:

  • Enhanced SASB standards: The ISSB has issued certain amendments to the non-climate related content in the Sustainability Accounting Standards Board (SASB) standards, with a view to enhance their international applicability. The amendments introduced mainly remove and replace jurisdiction-specific references , without significantly altering industries, topics or metrics. The key amendments issued include:
  • Replacing jurisdiction-specific terms of reference with internationally applicable references for standards, definitions or calculation methods
  • Providing general descriptions for standards, definitions or calculation methods to replace jurisdiction-specific terms of reference
  • Permitting preparers to use applicable jurisdictional laws or regulations to replace jurisdiction-specific terms of reference and align with preparers’ legal and regulatory compliance requirements
  • Removing certain jurisdiction-specific metrics that are unsuitable for international application, had no identified international equivalents or were not adaptable to general descriptions.
  • New educational material for IFRS S2: Additionally, ISSB has issued the new education material to help companies consider the nature and social aspects of climate-related risks and opportunities, when applying IFRS S2. The material sets out three examples, thereby illustrating how companies need to approach certain aspects of their climate-related disclosures.

To access the text of the resources, please click here

Action Points for Auditors

Currently, top 1,000 listed companies in India are required to furnish the Business Responsibility and Sustainability Reporting (BRSR) to the stock exchange(s). As per the BRSR guidance note, listed companies could prepare and disclose sustainability reports (as part of annual report) based on internationally accepted reporting framework such as the Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), etc. The mandatory reporting under BRSR does not restrict companies from adopting the ISSB framework and thus, companies may look to adopt these standards on a voluntary basis. In this regard, members should get an understanding of the aforementioned resources and discuss them with the management of companies that might be applying the ISSB standards in near future.

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