The public consultation seeks input on the priorities, strategic direction, and future work of the ISSB.

By Paul A. Davies, Michael D. Green, and James Bee

On 4 May 2023, the International Sustainability Standards Board (ISSB) launched a public consultation to seek input on its agenda priorities for a two-year period commencing in 2024. The consultation aims to inform the ISSB’s work plan once they have completed work on the creation of standards IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Financial Disclosures), which are expected to be issued in Q2 2023.

The agenda consultation seeks views on:

1. The strategic direction and balance of the ISSB’s activities

The ISSB denotes its activities as being divided into “foundational work” (in relation to building upon IFRS S1 and IFRS S2 when issued), and new research and standard-setting work. This consultation seeks feedback on the scope, content, and structure regarding the new research and standard-setting work.

The request for information seeks feedback on how the ISSB should prioritise its activities, which include supporting the implementation of ISSB standards, enhancing the Sustainability Accounting Standards Board (SASB) standards, and ensuring interoperability of the ISSB standards with others. Respondents are asked to rank the activities from highest to lowest priority.

2. The suitability of criteria to assess which sustainability-related matters to prioritise

The ISSB evaluates a new project primarily to determine whether it will meet investors’ information needs. It utilises seven criteria when deciding whether a project will meet investor’s needs; for example, how pervasive the matter will likely be for companies, how the project interconnects with other projects, and the project’s complexity and feasibility.

Respondents are asked to recommend any additional criteria the ISSB should consider and whether the current criteria identified is appropriate.

3. A proposed list of new research and standard-setting projects that could be added to the ISSB’s workplan

With regard to the potential research and standard-setting projects, the consultation seeks to gather views on four proposed projects as follows:

• Three research projects on sustainability-related risks and opportunities associated with:
  • biodiversity, ecosystems, and ecosystem services;
  • human capital; and
  • human rights.
• One research project regarding integration in reporting, exploring the integration of information in financial reporting beyond the requirements related to connected information in IFRS S1 and IFRS S2.

The project proposals include details on topic, project scope, and why the relevant area is considered a priority for the ISSB.

Next Steps

The request for information also encourages respondents to share other comments on the ISSB’s activities and work plan.

Comments on the request for information are requested by 1 September 2023, after which a Feedback Statement will be published in Q4 2023 – Q1 2024. Latham & Watkins will continue to monitor developments in this area.