On 15 July 2022, the AICD provided submissions to the International Sustainability Standards Board (ISSB) and the Australian Accounting Standards Board (AASB) concerning the two draft standards released by the ISSB related to general sustainability related financial information and climate related disclosures.
The AICD strongly supports the principle of harmonised international sustainability standards under the ISSB umbrella and urges a consistent approach across jurisdictions. We have consistently heard from members that there is a need to consolidate competing existing non-financial reporting frameworks, and to address growing investor demand for high quality, comparable disclosure. Such reporting will also allow companies to better benchmark their own sustainability practices and see where there may be room for improvement. A fragmented regulatory approach across jurisdictions would undermine these outcomes.
Other key points in our submissions included:
- We support climate change being identified as the first area to be the subject of a specific ISSB standard.
- We strongly recommend that further work be done to clarify and refine the Standards so that they are capable of reasonable, independent assurance.
- We urge a carefully designed phased-in approach that recognises the considerable uplift in practice and capability that will be required in markets such as Australia.
- We note there are unique aspects of the Australian legal environment that, if not addressed, will hinder comprehensive adoption. In this regard, specific legal advice from Herbert Smith Freehills on local ISSB implementation issues was included (see Attachment D to our AASB submission).
- We highlight current data and workforce skills gaps that, in the short term, will make comprehensive and consistent adoption of the Standards very difficult to achieve.
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