Overview of ISB's New Sustainability Standards

Introduction

• Presentation by Le Yansan Fudin on ISB's new sustainability standards.
• Importance of sustainability in financial reporting.

Key Organizations and Standards

• ISB: International Sustainability Standards Board.
  • Issues global sustainability standards under IFRS (International Financial Reporting Standards).
• EphS1 & EphS2: New sustainability standards introduced by ISB.
  • EphS1: Covers sustainability-related financial information.
  • EphS2: Focuses on climate-related financial information.
• TCFD: Task Force on Climate-related Financial Disclosures, transitioning to ISB from 2024.

Importance of Standards for Auditors and Practitioners

• Auditors need to understand the impact of ISB's standards on compiling financial statements.
• Applies to all entities preparing general-purpose financial statements.
• Includes sustainability-related disclosures alongside financial statements.

Requirements of the New Standards

EphS1: General Requirements

• Introduces a one-year transition period for first reporting.
• No need for comparative reporting in the first year.
• Requires disclosure of:
  • Strategies, governance, and processes regarding sustainability.
  • Assessment and monitoring of risks and opportunities throughout the value chain.
  • Progress towards regulatory targets.
  • Own sustainability metrics and performance.
• Appendix D emphasizes qualitative characteristics of useful sustainability-related financial information.

EphS2: Climate-Related Financial Information

• Disclosure of decarbonization strategies and climate resilience.
• Governance processes regarding climate-related risks and opportunities.
• Requires information on physical and transitional risks.
• Guidance on impacts of climate factors on company valuation.
• Encourages use of climate scenarios to report on resilience.

Effective Date and Publications

• Standards effective from January 1, 2024, for annual reporting periods starting December 2024 onwards.
• EphS1: 48 pages, includes appendix on application guidance.
• EphS2: 46 pages, focuses on climate-related risks.

Additional Resources

• Source documents available on the IFRS website for further detail.
• Daily technical alerts and webinars available for ongoing education.
• YouTube channel for technical summary videos and additional resources.
• Monthly updates on compliance and legislation developments.

Conclusion

• Understanding ISB sustainability standards is crucial for financial reporting.
• Emphasizes the importance of staying informed and utilizing available resources.