By Leigh Roberts, CEO of the IRC of SA
2023 will bring more changes for corporate reporting. The tumult of the past few years has
seen the rise of international sustainability reporting standards and the falling away of some
beloved reporting organisations in the midst of the industry consolidation. This year, we can
expect the finalisation of the first international standards, a scramble to push their inter-
operability, and a major thrust for their early adoption.
The International Sustainability Standards Board (ISSB) will release its first two standards on
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
and IFRS S2 Climate-related Disclosures this year – expected in June. The standards are likely
to carry a delayed effective date and the date currently being mooted is for financial years
starting on or after 1 January 2024 with early adoption allowed. The next exposure draft due
out from the ISSB – maybe late this year – could be biodiversity/nature as there is plenty of
existing sustainability guidance material from which the ISSB can draw (human rights is another possible exposure draft. Also significant is that the ISSB will – around April this year – seek stakeholders’ input on determining its line-up of new standards to be worked on over the next two years (i.e. what matters most).
The ISSB will also be hard at work on other projects too, such as its arrangement with the
GRI to enhance inter-operability between the two sets of standards, as well as with other
regional sustainability reporting initiatives such as the EU’s European Sustainability
Reporting Standards (ESRS) and the SEC’s climate disclosure requirements.
Both projects feed into its building blocks approach whereby the ISSB standards are positioned as the global baseline and facilitate inter-operability with each country’s specific requirements to meet
multi-stakeholder information needs (see this as a sort of layered cake approach).
And then there’s its major thrust to encourage the early adoption of its standards in the 145
countries that use the IFRS Accounting Standards issued by the International Accounting
Standards Board (IASB), its sister standard-setting body under the IFRS Foundation.
In Europe, the EU’s first set of twelve sustainability standards (ESRS) should come into play
under a phased-in approach that will see the first companies getting ready to report in their
2024 financial year. The second set of draft standards should be released in exposure draft
form later this year too – these will notably include sector-specific standards and
proportionate standards for SMEs.
And what’s in store for integrated reporting in 2023? Well, its carry on as usual in
integrated reporting and applying the Integrated Reporting Framework. But know that some
changes could be on the cards. The prime change could stem from the IASB and ISSB’s
moves to try and reconcile the widely used Integrated Reporting Framework with the newer
and untested management commentary exposure draft.
And perhaps on the cards too, is a joint IASB and ISSB project looking at the overall
corporate reporting structure – but no guesses on the timing of this one. (And hey, they
could just look at our octopus model to corporate reporting which has worked well in
South Africa over our ten years of integrated reporting).