Welcome, viewers, to an important discussion on the International Sustainability Standards and the game-changing dynamics they bring. The question we pose today is: How prepared is your organization for this transformative shift?"
"Sustainability, is a term often used but not always fully realized. Climate change, global warming, and renewable energy—all under the umbrella of sustainability. But how impactful is this term, considering its widespread use as a mere cliché?" The urgency for a standardized framework for Sustainability Reporting became apparent globally. The earth, burdened by relentless industrialization, prompted a call for action. This led to the birth of the International Sustainability Standards Board (ISSB) during Conference Of Parties (COP) 26 in Glasgow, Scotland with the theme Together for our Planet "
This was a game-changing moment as the global economy now looked forward to a global baseline for reporting all sustainable business practices, and eliminating all forms of Greenwashing (the act of falsely acclaiming green and sustainable business practices that actually non-existent). The ISSB was metamorphosized from the combinations of the Climate Disclosure Standard Boards (CDSB) and the Value Reporting Foundation (VRF). The ISSB is a robust sustainability reporting framework that embodies existing sustainable frameworks and refines them to suit a broad range of stakeholders.
The aim of the board is simple, and that is, to provide a global baseline for sustainability reporting that investors and capital market stakeholders can adopt. After due and in-depth global consultations, on 26th June, 2023, the ISSB issued its maiden two International Sustainability Disclosure Standards that become effective for periods beginning on or after 1st January 2024. They are the;
IFRS S1 (General requirements for the disclosures of Sustainability-related Financial Information), and
IFRS S2 (Climate-related Disclosures)
These two remarkable standards addresses unique yet cross-functional sustainability-related details, as where IFRS S1 seeks to gain congruence of details (connectivity of information) within what is reported in the General purpose financial statements and Sustainability-related reports, IFRS S2 seeks to disclose all details pertaining to how a business’ value chain contributes to carbon emission.
IFRS S1 proffers disclosure solutions around the four key contents of Governance, Risk Management, Strategy, and Metrics and Targets with emphasis on Sustainability-related risks and opportunities, while IFRS S2 proffers disclosure solutions around the same four key contents with emphasis on Climate-related risks and opportunities, and Green House Gas Emissions (under Scopes I,2 and 3).
With these standards taking effect in 2024, Here are five critical steps to consider as everyone launches into this era;
- Prepare a Value Proposition speaking to your business model and stakeholder needs,
- Undergo an extensive readiness and gap assessment to understand and reveal possible gaps in your systems, processes, and data pool,
- Create a roadmap to implement the provisions of IFRS S1 and S2,
- Undergo and initiate extensive capacity-building and training sessions for your staff, and
- Start elementary work on building your ISSB-compliant report.
So, the big question is, how prepared is your organization for this game-changing sustainability journey? We're here to guide you through.