Key points

  • On 2 May 2024, the IFRS Foundation and EFRAG jointly published interoperability guidance on climate-related disclosures for sustainability reporting.
  • This interoperability guidance illustrates where there is a  high level of alignment of the climate-related disclosures in the IFRS® Sustainability Disclosure Standards and the European Sustainability Reporting Standards (ESRS). It also notes areas with incremental disclosures and choices preparers need to make to enable interoperability.
What is the issue?
On 2 May 2024, the International Sustainability Standards Board (ISSB) and EFRAG jointly published interoperability guidance designed to reduce complexity for entities applying both the ISSBTM Standards and ESRS.
The guidance demonstrates the high degree of alignment between the ISSB Standards and ESRS specifically on the topic of climate-related disclosures – that is, the requirements of IFRS S2 and ESRS E1. The guidance also provides practical support and guidance on interoperability in relation to broader matters such as materiality of information, presentation and disclosures for sustainability topics in addition to that related to climate.
In the accompanying press release, both EFRAG and the ISSB noted that collaboration and joint efforts had been put into this guidance so that it could be published jointly. In particular, the chair of EFRAG’s Sustainability Reporting Board stated that the guidance illustrates how ESRS embeds the global baseline approach developed by the ISSB.
What’s the impact?
Those who are required to report, or are voluntarily reporting under both the IFRS Sustainability Disclosure Standards and ESRS are recommended to consider the interoperability guidance as a way to improve the efficiency of reporting under both sets of standards.
Where do I get more details? 
For more information, contact Andreas Ohl, Olivier Scherer or Katie Woods.
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