Submission on ISSB Exposure Drafts S1 and S2


On 29 July, ACGA submitted its response letter to the International Sustainability Standards Board (ISSB) on the Exposure Draft (ED) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (S1) and Exposure Draft IFRS S2 Climate-related Disclosures (S2).

In our letter we expressed our support for the proposed standards on sustainability-related financial disclosures which aim to pull together standards from the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB) and Climate Disclosure Standards Board (CDSB) into one coherent whole. We also agreed with the building blocks approach which can be used to add on non-financial disclosures adhering to standards such as the Global Reporting Initiative (GRI) that may focus on impact or “double materiality”.

We agreed that disclosures made under the proposed ISSB standards be released at the same time as a reporting entity’s other annual reports and financial statements, that they include narrative explanation of the connectivity between the two, and that they cover the same entities.

We offered a number of suggestions on the drafts. The standards could:

  • Clarify that entities are being asked to assess the sustainability of the enterprise (defined as in “continuity”) through the lens of sustainability dimensions (defined as in “ecological or ESG terms”)
  • Define the term “significant” and explain whether it is equivalent to “material”
  • Provide more guidance to improve accessibility to inexperienced reporters and enhance comparability

We also pointed out that when Scope 1 and Scope 2 disclosures from all entities (large and small, listed and unlisted) are available, reliable and less costly Scope 3 data is available for all entities. We also suggested that less-than-perfect scenario analysis from inexperienced entities is also a valuable input for assessing risks to other entities in the same value chain. 

Finally, we expressed our concern about a proposal to allow entities that have not met all of the relevant disclosure requirements to still claim full compliance. We suggest that entities that do not meet all the standards should clearly state which requirements were not met and why. They would then be permitted to assert partial compliance with the standards.