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Are Australian Companies Prepared for the New Sustainability Disclosure Standards?


The International Sustainability Standards Board (ISSB) has released its long-awaited sustainability disclosure standards - IFRS S1 and IFRS S2, requiring companies to disclose ‘globally comparable’ information about their sustainability position for capital markets and investors.

IFRS S1 is focused on the sustainability-related risks and opportunities that a company faces over time. IFRS S2 requires specific climate-related disclosures.

The Standards require ‘next-level’ sustainability reporting in capital markets and introduce a ‘common language’ for companies to disclose climate-related risks and opportunities informing their prospects.

Emmanuel Faber, ISSB Chair said: “The ISSB Standards have been designed to help companies tell their sustainability story in a robust, comparable and verifiable manner. We have consulted closely with the market to ensure the Standards are proportionate and will result in disclosures that are relevant for investment decision-making.”

The new Standards incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Where the Standards are applied in conjunction with other reporting standards such as GRI, the ISSB will continue its work to ensure effective reporting.

Mary Schapiro, Head of the TCFD Secretariat and Vice Chair for Global Public policy at Bloomberg LP said: “The global economy needs common reporting standards to reduce fragmentation and drive comparability in climate-related financial data. Built upon the foundation of the TCFD framework, the ISSB Standards provide a global baseline for companies to disclose decision-useful, climate-related financial information—information that is critical for creating more transparent markets, helping achieve a smooth low-carbon transition, and building a more resilient and sustainable global economy.”

The Business Council for Sustainable Development (BCSD) Australia, said the new comprehensive reporting standards will be transformative for Australian business and capital markets in reporting on their Ambition, Action and Accountability in their ESG data.

Andrew Petersen, CEO of BCSD Australia said: “By adopting the ISSB's standards, companies will be better equipped to meet the growing expectations of investors, regulators, and the public at large. Additionally, these standards will help organisations identify risks and opportunities associated with sustainability, ultimately contributing to better decision-making and resource allocation.”

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