Date posted: 27/06/2023

CA ANZ welcomes momentous step towards harmonising global sustainability reporting

The release by the International Sustainability Standards Board’s (ISSB) of its first two standards marks an important milestone for finance professionals and finance teams, according to Chartered Accountants Australia and New Zealand (CA ANZ). 

The ISSB’s standards aim to provide a comprehensive global baseline of sustainability disclosures for capital markets and enable consistent, comparable and high-quality sustainability reporting. 

CA ANZ, a member of the Global Accounting Alliance, recognises the critical role the global accounting profession plays in the effective implementation of these new standards. 

“The release of the ISSB’s first two standards means Australian companies have clarity over the requirements and can begin preparing for the disclosures,” said CA ANZ Sustainability and Business Reform Leader Karen McWilliams FCA. 

A short time ago at the International Financial Reporting Standards (IFRS) Foundation Conference in London, the ISSB chair Emmanuel Faber launched IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related disclosures. 

“The ISSB have recognised the initial focus of investors on climate disclosures and their transitional reliefs will enable companies to report in line with IFRS S2 in the first year of reporting,” said Ms McWilliams. 

The standards follow extensive consultation and due process. CA ANZ provided feedback during the consultation period and helped to convene a response from 20 peak Australian professional bodies and industry groups. The ISSB is currently consulting on the priorities for its next two-year workplan. 

“We are currently engaging with our Members to inform our feedback to the ISSB on where they should be focusing their efforts and resources,” said Ms McWilliams. 

In Australia, we are currently awaiting the next consultation from Treasury to establish a climate-related financial disclosure framework for certain entities, likely to commence in FY24/25 for large listed entities and financial institutions. The Australian Accounting Standards Board (AASB) has been tasked with developing the sustainability disclosure standards that will underpin the framework, in line with IFRS S2. 

“The timing of these standards enables Australia to align the domestic development of a climate-related disclosure framework with the global baseline established by the ISSB,” said Ms McWilliams. 

CA ANZ is also pleased to announce it is the first Australian organisation in the IFRS Foundation’s Partnership Framework for capacity building. 

“This partnership will enable CA ANZ to proactively support those preparing the disclosures, investors and other stakeholders as they get ready to implement the IFRS Sustainability Disclosure Standards,” said Ms McWilliams. 

“CA ANZ’s ongoing work in this space will develop and deliver resources and education to support the effective implementation and adoption of sustainability-related disclosure practices. 

“While many of Australia’s largest companies already report climate-related information, the ISSB’s standards will provide much needed consistency and comparability in their disclosures. They also provide clarity of the requirements for a wider range of entities, who may report in line with these standards over time.  

“Climate-related risks and opportunities increasingly have financial consequences for organisations and investors want robust consistent and comparable information to inform their investment decision making.” 

Deloitte and CA ANZ have also collaborated to provide practical insights and actions to help finance professionals and finance teams prepare for reporting under the ISSB’s standards issued today. 

These include: 

  • Materiality, how its defined in the Standards and the relevance for financial accounting  
  • Data and systems which summarises the implications of the Standards and actions finance professional teams should take in preparation for reporting 
  • The connection between sustainability disclosures and financial outcomes  

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