The IIF submitted a comment letter to the International Sustainability Standards Board (ISSB) on the ISSB’s Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and Exposure Draft IFRS S2 Climate-related Disclosures.
In the letter, the IIF expresses its general support of the ISSB’s objective to develop a comprehensive global baseline of sustainability disclosures. The IIF has previously advocated for the establishment of an internationally recognized framework for sustainability disclosures as an urgent priority. The continued evolution of disclosure practices, methodologies, metrics, and expectations creates a pressing imperative for alignment.
The IIF encourages the ISSB to continue its close dialogue and collaboration with voluntary frameworks and standard setters, as well as jurisdictional authorities to enable as much international convergence as possible and to avoid overlaps and inconsistencies as the IFRS Sustainability Disclosure Standards and different jurisdictional frameworks evolve. To avoid fragmentation, global consensus must be built on the IFRS Sustainability Disclosure Standards, with a clear and direct route towards global adoption and/or recognition.
The IIF perceives that there may be aspects of the IFRS Sustainability Disclosure Standards which, as proposed, may create challenges for corporates and financial institutions. For instance, many IIF members are concerned that the ISSB’s definition of ‘enterprise value’ might lead to myriad interpretations in different jurisdictions if such terms were applied differently in both existing and new policy frameworks and requirements. This could lead to consistency and comparability issues in disclosures, which would ultimately impede achieving the ISSB’s mission of setting global standards.