CA ANZ and CPA provided feedback to the International Sustainability Standards Board (ISSB) on the methodology for enhancing the international applicability of the SASB standards and SASB standards taxonomy updates.

In our opinion, sustainability reporting will achieve equivalent standing with financial reporting, reflecting increasing demand from investors and stakeholders for such sustainability-related information. Providing information on industry-specific, material sustainability-related topics and related metrics and targets will be critical to ensure comparability, resource benefits (both time and cost) and ease of understanding by investors.

Our key points included:

• We believe that enhancing the international applicability of the SASB Standards, is a logical step to position the standards as a viable mechanism for reporting entities globally, particularly given the jurisdictional focus (to date) of the standards for the United States (US) market.
• We note that the climate-related metrics have been removed from the SASB Standards and incorporated into IFRS S2 Climate-related disclosures. In order to provide appropriate feedback on the internationalisation and maintenance of the SASB Standards, it is necessary for stakeholders to understand their position in relation to the ISSB’s global baseline. We recommend the ISSB provide clarity over their overarching vision for the SASB Standards and their longer-term positioning alongside the ISSB Standards.
• Overall, we believe that that proposed methodology is logical and follows an appropriate, cascaded approach to the review of the current SASB Standards. However, it is important to note that whilst this methodology and process will enhance the international applicability of the SASB Standards, it does not mean that they will be internationally applicable.
• We understand the need to expedite this process, however we are concerned that this will not subject each SASB Standard to an appropriate level of due process. Should internationalisation of the SASB Standards be identified as a priority through the ISSB’s Request for Information Consultation on Agenda priorities, each standard should individually undergo a more thorough review and revision. We also recommend that thought should be applied to a mechanism for ongoing review of the standards in addition to the considerations around the internationalisation of the standards.
• We note that Approaches 4 and 5 are framed along a reductive approach. There are certain topics that are currently not addressed, with no viable option considered to accommodate topic additions if required.
• As noted in the ED, this targeted exercise by the ISSB is to ensure that entities referring to the SASB standards in applying to IFRS S1 can use relevant metrics regardless of which jurisdiction a preparer operates in. However, the proposed revisions for international applicability are not exhaustive and specifically exclude some industry-specific sustainability-related issues that are considered fundamental in jurisdictions outside of the US. We strongly recommend industry and investors are engaged globally to identify industry-specific cross-jurisdictional metrics, which may be missing from the current standards.
• The ED outlines that the proposed enhancements will preserve the structure, completeness and intent of the SASB standards. Our interpretation of this statement is that there is no intention to internationalise industry-based descriptions or classifications, and that these will remain US focused. We are concerned this will affect the international applicability of the SASB Standards and recommend the use the Global Industry Classification Standard, which is both global and investor led. It is our view that one of the key benefits of the use of this standard would be that local jurisdictional industry classifications are likely to already be mapped against the standard.