Along with the release of the exposure drafts, International Sustainability Standards Board (ISSB) Chair Emmanuel Faber and Vice-Chair Sue Lloyd have communicated plans for building upon the SASB Standards and for embedding SASB’s industry-based standards development approach into the ISSB’s standards development process.
As the IFRS Foundation Trustees committed when launching the ISSB, it will build on the work of existing investor-focused reporting initiatives to become the global standard-setter for sustainability disclosures for the financial markets. The ISSB made substantial progress toward this goal this week when it issued exposure drafts of two proposed standards General Requirements for Disclosure of Sustainability-related Financial Information and Climate-related Disclosures. These exposure drafts consolidate content from the TCFD, CDSB, SASB, Integrated Reporting, and the WEF IBC’s stakeholder capitalism metrics into a coherent whole.
SASB’s industry-based standards development approach identifies the sustainability disclosure topics most relevant to enterprise value for the typical company in an industry, enabling companies to provide decision-useful information about a range of sustainability-related risks and opportunities to investors and other capital market participants. SASB Standards, including the industry-based approach used by the SASB, will be built upon and supported in the following ways:
Emmanuel Faber, ISSB Chair, commented:
We are convinced that the industry-based approach used to develop the SASB Standards is a market-validated model for the development of decision-useful and cost-effective sustainability disclosure standards. Therefore, I strongly encourage continued use of the SASB Standards and recognize their near-term priority role for preparers in the application of the proposed General Requirements Standard. Further enhancing and evolving the SASB Standards will be a priority for the ISSB, as embedding the industry-based approach in the work of the ISSB is essential to delivering Standards that support investors’ assessments of enterprise value across a broad range of sustainability issues.
1 Any standard-setting proposals of the ISSB will be subject to due process.