Key points

  • The International Sustainability Standards Board (ISSB) has recently published its exposure draft, Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates.
  • The ISSB is seeking feedback on its proposed methodology for enhancing the international applicability of the SASB standards.
  • The deadline to provide the feedback is Wednesday 9 August 2023.
What is the issue?
The SASB, now part of the IFRS Foundation, has, over the years, issued over 70 industry-focused sustainability reporting standards. IFRS S1, 'General Requirements for Disclosure of Sustainability-related Financial Information', is expected to require preparers to refer to and consider the SASB standards in identifying sustainability-related risks and opportunities and in developing related disclosures, if no relevant IFRS Sustainability Disclosure Standard is available. As a consequence of the international focus of the SASB standards, the ISSB has taken responsibility for updating the standards.
The SASB standards often have laws and regulations as the source of their disclosures. In these instances these are primarily from the United States of America. It is therefore not surprising that the ISSB has identified that 20% of the SASB standards metrics contain jurisdiction-specific references defining their scope, methods or parameters.
In order to update the standards, the exposure draft, ‘Methodology for Enhancing the International Applicability of the SASB® Standards and SASB Standards Taxonomy Updates’ (ED), proposes the following five steps which the ISSB has set out to amend the non-climate-related SASB standards metrics to enhance their international applicability:
  1. substituting available internationally applicable references for standards, definitions or calculation methods to replace jurisdiction specific-references;
  2. providing more generalised references for standards, definitions or calculation processes to replace jurisdiction-specific references;
  3. adopting generalised jurisdictional references to enable preparers to use applicable jurisdictional laws, regulations, methodologies or guidance to replace jurisdiction-specific references;
  4. removing – in a limited number of cases – disclosure metrics that are not used  for international application or have no identified international equivalents outside specific jurisdictions; and
  5. removing and replacing jurisdiction-specific metrics where a relevant replacement can be identified to preserve the disclosure topic’s integrity – aligning with the intent of the original metric as much as possible based on research – to meet the needs of users of general purpose financial reports.

The climate-related metrics in the SASB standards are covered in Appendix B (the industry-based disclosure requirements) to IFRS S2, 'Climate-related Disclosures'.
The ED also includes proposals for updating the SASB Standards Taxonomy to reflect the proposed amendments to enhance the international applicability of the SASB standards.
What is the impact?
The ISSB has stated that by using the revised metrics, an entity will be able to apply the SASB standards regardless of the entity’s jurisdiction or the generally accepted accounting principles (GAAP) that it applies. The ISSB stated its objective of updating the standards to provide industry-based guidance on the application of the IFRS Sustainability Standards.
Once comments are received and considered by the ISSB, the IFRS Foundation plans to issue targeted amendments to the SASB standards and the SASB Standards Taxonomy to facilitate the implementation and application of IFRS S1.
What is the deadline to respond?
The consultation is currently open for comments on the IFRS Foundation®'s website. The deadline to respond is 9 August 2023.
Where do I get more details?
For more information, contact Andreas Ohl or Katie Woods.
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