Date posted: 22/07/2022

Submission on Exposure Draft 321

Our joint submission with CPA Australia and the Peak Australian Bodies submission to the Australian Accounting Standards Board (AASB), in relation to the International Sustainability Standards Board’s (ISSB) consultation.

The Australian Accounting Standards Board (AASB) called for submissions on Exposure Draft 321: Request for Comment on [Draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and [Draft] IFRS S2 Climate-related Disclosures.

Key points from the submission include:

  • We support improved, comparable and consistent disclosure of Scope 3 emissions. In our view, to remain internationally competitive and to align with global best practice, any reporting requirement adopted in Australia should include Scope 3 emissions reporting.
  • We note that the metrics contained in Appendix B are inherently based on the United States environment and therefore might not be suitable in the Australian context, particularly given the industry classification, units of measurement and choice of metrics differ between the two jurisdictions.
  • We suggest a phased in approach for adoption would be most appropriate, initially commencing with a subset of for-profit entities. This reflects the readiness of Australian entities to adopt the proposals, with large, listed entities typically being more mature and prepared. However, some entities will require considerable time to scale up their expertise and capacity.
  • In the domestic implementation of the ISSB standards, the local legal context needs to be considered fully. We suggest that clear guidance from domestic regulators, and if necessary regulatory support, may be needed to ensure that entities can produce the specific forward-looking statements required by the ISSB standards.
  • There is a critical role for independent external assurance to enhance the credibility of sustainability information. In our view, the goal should be for investors and other stakeholders to rely on the assurance obtained and the integrity of the information, in a congruent way, similar to the way they rely on assurance obtained in an audit of the financial statements.

We also supported the coordination of and contributed to the Peak Australian Bodies submission on both the ISSB’s and AASB’s consultation. This submission collectively represents the voice of 20 peak professional, industry and investor bodies in Australia.

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