Deloitte welcomes ISSB’s issuance of first sustainability standards

Deloitte has welcomed the publication of the ISSB’s first sustainability standards, IFRS S1 and S2, calling it an “important milestone” in achieving a global baseline of consistent sustainability information.

The firm said adoption of the standards worldwide is needed to help achieve “true harmonisation” and avoid a fragmented approach to regulation. It added that policymakers and regulators should keep the objective of a consistent global baseline in mind in light of global jurisdictions increasingly establishing their own regulations and standards on sustainability disclosure.

It warned that fragmentation can “create barriers to comparability, undermine the utility of sustainability information in decision-making, and lead to complex and extensive compliance exercises—which could divert resources and investment from actions that support the achievement of climate objectives and sustainable development”. 

Veronica Poole, Deloitte Global IFRS and corporate reporting leader, said: “By building on existing standards and frameworks, the ISSB has been able to make good progress. Its first standards set out the principles and overall requirements for disclosure of sustainability-related risks and opportunities and specific requirements for climate-related disclosures.”

Kristen Sullivan, Deloitte Global Audit and Assurance Sustainability and Climate Services leader, added: “Capacity building in reporting is also key to ensuring standards achieve their objective. Companies will need to bring sustainability standards and reporting into their everyday vocabulary and skillset, and build their reporting capacity, including in relation to governance, controls and assurance. 

“Deloitte is pleased to support the ISSB’s Partnership Framework for Capacity Building, announced at COP27, the main purpose of which is to drive adoption of a global sustainability baseline that is truly inclusive in nature. Deloitte recognizes the role it plays in audit and assurance to enhance the confidence of users of sustainability reporting. Deloitte is therefore encouraged by the progress the International Auditing and Assurance Standards Board is making to develop a sustainability assurance standard—ISSA 5000.”

Poole concluded: “Climate-related risks and opportunities are increasingly creating measurable financial impact for companies and that’s why capital markets participants want consistent, comparable and reliable climate-related disclosure.

“Standards drive quality reporting and risk protection for organisations, and this is why we welcome the ISSB’s work to establish a global baseline for sustainability standards to meet the information needs of investors. By building on existing frameworks—as has already been done by incorporating the Taskforce for Climate-related Financial Disclosures recommendations into the ISSB standard on climate-related disclosures—the ISSB can continue to make rapid progress.”