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    IFRS Requests Feedback on Sustainability Disclosure Taxonomy

    May 25, 2022

    The International Financial Reporting Standards (IFRS) Foundation published a staff request for feedback to inform future development of the IFRS Sustainability Disclosure Taxonomy for digital reporting. The request for feedback document outlines staff recommendations reflecting proposals in the two exposure drafts published by the International Sustainability Standards Board (ISSB). These exposure drafts are related to the general requirements for disclosure of sustainability-related financial information (IFRS S1) and the climate-related disclosures (IFRS S2). The request for feedback is open for comments until September 30, 2022.

    The purpose of this request for feedback is to support initial research by the IFRS Foundation staff to inform the development of proposals for the IFRS Sustainability Disclosure Taxonomy. This request for feedback sets out the initial thinking for staff recommendations to the ISSB for consideration when developing the proposed IFRS Sustainability Disclosure Taxonomy. The staff has prepared a staff draft of the IFRS Sustainability Disclosure Taxonomy that is based on the proposals in the exposure drafts and reflects staff recommendations discussed in this request. The staff recommendations focus on fundamental matters that need to be considered early to enable the ISSB to publish the IFRS Sustainability Disclosure Taxonomy on a timely basis. The recommendations include the following:

    • Create a distinct IFRS Sustainability Disclosure Taxonomy separate from the IFRS Accounting Taxonomy
    • Organize the general content of the IFRS Sustainability Disclosure Taxonomy, by both the IFRS Sustainability Disclosure Standard and the aspects of core content
    • Reflect the proposed disclosure requirements related to each aspect of core content as a separate list of distinct elements (line items) for each of the (draft) IFRS Sustainability Disclosure Standards
    • Distinct taxonomy elements should be created for narrative information that is expected to be separately understandable to primary users of sustainability-related financial information as well as easily identifiable for tagging
    • Use categorical elements for narrative disclosures that can be represented as either true or false responses or choices from lists of responses
    • Create elements, equivalent to those in the Sustainability Accounting Standards Board (SASB) Taxonomy, for defined metrics common to the IFRS Sustainability Disclosure Standards and the SASB Standards in the IFRS Sustainability Disclosure Taxonomy
    • Model disclosures for entity-specific metrics and targets using a dimensional approach
    • Should not model explicitly the requirements for cross-references in the IFRS Sustainability Disclosure Taxonomy

    ISSB expects to publish the proposed IFRS Sustainability Disclosure Taxonomy (proposed Taxonomy) concurrently with or shortly after it issues the IFRS Sustainability Disclosure Standards. ISSB will then consider feedback on the proposed Taxonomy and the need for further changes before publishing the IFRS Sustainability Disclosure Taxonomy. 

     

    Keywords: International, Banking, Insurance, Securities, Disclosures, Taxonomy, ESG, Climate Change Risk, Sustainable Finance, ISSB, IFRS

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