NEW YORK, NY, USA, 26 June 2023 — Deloitte welcomes the publication of the ISSB’s first sustainability standards—International Financial Reporting Standards (IFRS) S1 and S2—as an important milestone in achieving a global baseline of consistent, high-quality, and comparable sustainability information addressing the needs of capital markets.
By building on existing standards and frameworks, the ISSB has been able to make good progress,
said Veronica Poole, Deloitte Global IFRS and corporate reporting leader.
Veronica Poole, Deloitte Global IFRS and corporate reporting leader.
"Its first standards set out the principles and overall requirements for disclosure of sustainability-related risks and opportunities and specific requirements for climate-related disclosures."
Adoption of the ISSB standards worldwide is needed to help achieve true harmonization and avoid the risk of a fragmented approach to regulation. While jurisdictions around the world are increasingly establishing their own regulations and standards on sustainability disclosure to meet their own policy priorities, policymakers and regulators should keep the objective of a consistent global baseline in mind. Alignment and interoperability are essential to avoid regulatory fragmentation. Fragmentation can create barriers to comparability, undermine the utility of sustainability information in decision-making, and lead to complex and extensive compliance exercises—which could divert resources and investment from actions that support the achievement of climate objectives and sustainable development. To that end, Deloitte is encouraged by the commitments already made in a number of jurisdictions to adopt the ISSB standards as well as the statements of support issued by G7, G20 and the International Organization of Securities Commissions (IOSCO).
“Capacity building in reporting is also key to ensuring standards achieve their objective,” said Kristen Sullivan, Deloitte Global Audit & Assurance Sustainability and Climate Services leader. “Companies will need to bring sustainability standards and reporting into their everyday vocabulary and skillset, and build their reporting capacity, including in relation to governance, controls and assurance. Deloitte is pleased to support the ISSB’s Partnership Framework for Capacity Building, announced at COP27, the main purpose of which is to drive adoption of a global sustainability baseline that is truly inclusive in nature. Deloitte recognizes the role it plays in audit and assurance to enhance the confidence of users of sustainability reporting. Deloitte is therefore encouraged by the progress the International Auditing and Assurance Standards Board is making to develop a sustainability assurance standard—ISSA 5000.”
“Climate-related risks and opportunities are increasingly creating measurable financial impact for companies and that’s why capital markets participants want consistent, comparable and reliable climate-related disclosure,” Poole concluded. “Standards drive quality reporting and risk protection for organizations, and this is why we welcome the ISSB’s work to establish a global baseline for sustainability standards to meet the information needs of investors. By building on existing frameworks—as has already been done by incorporating the Taskforce for Climate-related Financial Disclosures recommendations into the ISSB standard on climate-related disclosures—the ISSB can continue to make rapid progress.”
Veronica has played a prominent role in facilitating harmonization of standards by working with international sustainability standard-setters to advance a comprehensive corporate reporting system. She leads Deloitte’s contributions to the World Economic Forum (WEF) International Business Council’s ‘Stakeholder Capitalism Metrics’ project. This included leading WEF’s contribution to the IFRS Foundation’s Technical Readiness Working Group that developed prototype standards and made recommendations to the new ISSB.
Kristen brings extensive experience in delivering sustainability risk assessment, governance, strategy alignment, measurement, reporting, and assurance services. Given the growing market emphasis on the importance of environmental, social, and governance (ESG) standards and frameworks, Kristen serves as a member of the Global Reporting Initiative (GRI) Community, she chairs the American Institute of Certified Public Accountants (AICPA) Sustainability Advisory and Assurance Task Force and the ISSB/AICPA Task Force. She also previously served on the International Integrated Reporting Council (IIRC) Working Group.