Standard setters highlight concerns in letter to ISSB
The UKEB said feedback from UK stakeholders together with its own research highlights that they ‘do not consider that this is yet complete’
A heavyweight consortium of national standard setters from around the world has written to the International Sustainability Standards Board (ISSB), voicing a string of concerns about its alignment with international financial reporting standards.
In the letter to ISSB chairman Emmanuel Faber, the consortium highlighted connectivity with accounting standards, the ISSB’s strategic roadmap and implementation priority as areas that are in particular need of attention.
The letter is signed by senior representatives of the UK Endorsement Board (UKEB), the Canadian Accounting Standards Board (AcSB), the Malaysian Accounting Standards Board (MASB), the Australian Accounting Standards Board (AASB) and the New Zealand External Reporting Board (XRB).
On connectivity with accounting standards, the letter warned that close alignment and connectivity between financial and sustainability reporting is “paramount” to ensure that the information produced for investors is both compatible and comparable.
However, the UKEB said feedback from UK stakeholders together with its own research highlights that they “do not consider that this is yet complete.” Last month it published two reports highlighting the scale of connectivity challenges.
Having issued their inaugural sustainability standards in June – IFRS S1 and IFRS S2 – the ISSB’s consultation over the summer sought to gain feedback on priorities for its next two-year work plan.
The signatories, however, called on the ISSB to do a better job of communicating its long-term objectives, suggesting that looking beyond the time horizon of the next work plan would be beneficial.
All signatories agree that the highest priority of the ISSB should be the successful implementation of the inaugural standards, with potential existential implications for the ISSB.
The need to prioritise implementation of IFRS S1 and IFRS S2 was also voiced by ICAEW in its own response to the ISSB Agenda Consultation in August. In its response, ICAEW said achieving widespread global adoption of the initial standards could form an excellent foundation for growth and expansion into new topic areas.
Sally Baker, head of corporate reporting strategy at ICAEW, said: “We recognise the difficulties for the ISSB in prioritising future activities and projects as they are all important and worthwhile. In line with the views expressed in the letter however, we strongly encourage the ISSB to prioritise activity that supports the implementation and uptake of IFRS S1 and IFRS S2 above all else.
“We also share the view that it would be beneficial for the ISSB to set out a clear statement of intent regarding the development of future standards.”
