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    ISSB Takes Over TPT and Partners with GHG Protocol

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    Stockholm (NordSIP) – At the IFRS Foundation Conference, Emmanuel Faber, Chair of International Sustainability Standards Board (ISSB), announced a series of initiatives aimed at further harmonising sustainability reporting. To this end, the ISSB announced it will take over the disclosure-specific materials developed by the Transition Plan Taskforce (TPT). The ISSB also announced it had come to an agreement with the GHG Protocol to ensure compatibility between the organisations’ GHG reporting standards.

    Taking Over TPT Disclosures

    The IFRS Foundation will assume responsibility for the disclosure-specific materials developed by the TPT, whose disclosure framework and related guidance draws on components identified by the Glasgow Finance Alliance for Net Zero (GFANZ)[1]. The disclosure-specific materials will be housed on the IFRS Sustainability Knowledge Hub. The ISSB’s takeover of the TPT is conducted in the pursuit of the application of its the IFRS2 disclosure requirements and to reduce fragmentation in information provided in the market, the ISSB plans to support work to streamline and consolidate frameworks and standards for disclosures about transition plans.

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    This will also align with the ISSB’s focus on supporting the implementation of IFRS S1 and IFRS S2 over the next two years. The focus of the ISSB in this regard will continue to be on the provision of high-quality, decision-useful information about the plans that companies have, consistent with the focus of IFRS S2, rather than requiring that companies engage in transition planning, per se.

    “As we embark on our new two-year work plan that will see us strengthen and build out the global baseline of sustainability-related financial disclosures, I am grateful to our partners in the sustainability reporting landscape for their commitment to delivering an efficient, effective sustainability disclosure system for capital markets,” ISSB Chair Emmanuel Faber said.

    In the near term, the IFRS Foundation expects to use these materials to develop educational materials, ensuring that they do not change the requirements in IFRS S2, by tailoring them to ensure global applicability and to deliver full compatibility with the global baseline and IFRS S2’s focus on disclosures of the climate-related risks and opportunities affecting an entity’s prospects, to meet the needs of investors and the financial markets.

    Over time, the ISSB will consider the need to enhance the application guidance within IFRS S2. In so doing, the ISSB will utilise these materials, as relevant, to support the provision of high-quality disclosures to meet investors’ information needs. Any such enhancements would be undertaken in accordance with the IFRS Foundation’s due process and mission.

    Cooperating with GHG Protocol

    IFRS S2 requires GHG emissions to be measured in accordance with the GHG Protocol Corporate Standard (2004), given its wide use around the world. Furthermore, IFRS S2 requires companies to use the categories of Scope 3 as set out in the Corporate Value Chain (Scope 3) Standard (2011).

    To ensure ongoing compatibility between the work of the GHG Protocol and the ISSB and to ensure that the information provided meets the needs of capital markets, the IFRS Foundation and GHG Protocol have signed a Memorandum of Understanding to put in place governance arrangements so that the ISSB is actively engaged in updates and decisions made in relation to the GHG Protocol standards and guidance. This includes the appointment of a representative of the ISSB as an observer on the GHG Protocol Independent Standards Board.

    “This coordination between the IFRS Foundation and GHG Protocol is a momentous step in standardising GHG reporting globally. The deepening of the collaboration between the two parties will be a great benefit to companies seeking to measure, manage and report on their GHG emissions, and close collaboration with the IFRS Foundation will be invaluable to GHG Protocol’s standards update process for the suite of corporate standards,” GHG Protocol Independent Standards Board Chair Professor Alexander Bassen concluded,

     

     

    Image courtesy of Vardan Papikyan via unspash
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