This decision came following careful analysis of feedback from its first two proposed sustainability-related disclosure standards—IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
As part of these requirements, the ISSB will develop relief provisions to help companies apply the Scope 3 requirements. This relief will be decided at a future meeting and could include giving companies more time to provide Scope 3 disclosures and working with jurisdictions on so-called “safe harbor” provisions, which give companies protection from, or reduce, liability on information disclosed to investors and other capital market participants.
Scope 1 covers direct emissions from a company; scope 2 covers indirect emissions from electricity purchased and used; and scope 3 covers all other indirect emissions from the value chain.
The ISSB also clarified key concepts from the General Requirements Standard at the meeting. It confirmed that its requirements will focus on meeting the information needs of investors and decided to modify language in the proposals that was not clearly understood.
The ISSB has also confirmed it will use the same definition of material as is used in IFRS Accounting Standards and will discuss at a future meeting the need for further guidance on how to determine what is material information.
December 2022
