ISSB Publishes Digital Sustainability Disclosure Taxonomy

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    Stockholm (NordSIP) – Although the European Union stands at the forefront of sustainable regulatory efforts, the transition towards more sustainable economic practices cannot advance solely on the basis of European efforts. To address this issue, the International Financial Reporting Standards (IFRS), via the International Sustainability Standards Board (ISSB), has engaged in a number of reporting initiatives and updates to provide global users of its accounting standards a channel through which to report their sustainability footprint.

    To this end, the ISSB has published the IFRS Sustainability Disclosure Taxonomy (ISSB Taxonomy), which seeks to enable investors and other capital providers to analyse sustainability-related financial disclosures efficiently. The ISSB Taxonomy joins a range of ISSB digital reporting tools available to registered users from the new IFRS Sustainability Disclosure Taxonomy section.

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    The ISSB Taxonomy was designed to be consistent with the IFRS Accounting Taxonomy so that companies can provide a holistic digital financial reporting package to investors, the ISSB Taxonomy can also be used with other digital taxonomies. It includes elements for tagging sustainability-related financial information prepared in line with IFRS Sustainability Disclosure Standards. These elements enable a company to tag information about its sustainability-related risks and opportunities in its general-purpose financial reports. Tagging makes the information computer-readable, enabling investors to extract, compare and analyse it more efficiently. The IFRS Sustainability Disclosure Taxonomy enables investors to compare and analyse sustainability-related financial information in a digital format.

    “As jurisdictions around the world are considering the adoption or other use of ISSB Standards, the publication of the ISSB Taxonomy only a few months after the effective date of our inaugural Standards is critical to support capital market transparency and efficiency and enable companies and investors to digitally process sustainability-related financial disclosures provided through use of the ISSB Standards. Furthermore, we have taken steps to ensure the ISSB Taxonomy can help facilitate interoperability with other taxonomies when necessary—for example, to facilitate interoperability with the taxonomy being developed by EFRAG—enabling all companies and investors to immediately more effectively identify disclosures required by the ISSB,” ISSB Chair Emmanuel Faber said

    The IFRS’s new Digital financial reporting page also includes educational material that aids understanding and supports the use of the IFRS digital taxonomies.

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.
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