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ISSB - International Applicability of the SASB Standards

Description

​The ISSB seeks to enhance the international applicability of non-climate related metrics in the SASB Standards in 2023. Such enhancements will preserve the structure, compleleness and intent of SASB Standards;

The enhancements are designed to ensure that entities can apply the SASB Standards regardless of the jurisdiction in which they operate or the type of generally accepted accounting principles (GAAP) they apply.

In descending order or preference, amendments to the SASB Standards would be made by:

a) substituting available internationally applicable references for standards, definitions or calculation methods to replace jurisdiction-specific references;

b) providing more generalised definitions for standards, definitions or calculation processes to replace jurisdiction-specific references;

c) adopting generalised jurisdictional references to enable preparers to use applicable jurisdictional laws, regulations, methodologies or guidance to replace jurisdiction-specific references;

d) removing - in a limited number of cases - disclosure metrics that are ill-adapted for international application or have no identified international equivalents outside specific jurisdictions; and

e) removing and replacing jurisdiction-specific metrics when 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 ISSB issued its ED on 9 May 2023 with a 90 day comment period. EFRAG issued its draft comment letter (DCL) on 2 June 2023. In its DCL, EFRAG stated that the proposed methodology would improve the international applicability of the SASB standards but points to the following improvements that could be made: i) keeping an acceptable comparability level when working with national references and ii) the ratification status of international references.

EFRAG considers the proposed methodology a reasonable transition approach, pending a more extensive standard setting activity to enhance the SASB Standards.

EFRAG requests the ISSB to develop a gap analysis between the SASB standards and sustainability reporting frameworks developed more recently or which are being developed. The results of this gap analysis should then serve as a basis for updates to the SASB standards. 

EFRAG agrees to update the SASB XBRL Taxonomy to reflect the amended SASB standards accordingly, as suggested. EFRAG invites the ISSB to work with EFRAG on an harmonisation of the sector specific digital XBRL taxonomies of the ESRS and ISSB standards.

EFRAG received and considered 14 contributions from stakeholders to its draft comment letter. They generally supported the messages in the draft letter. Further risks with the proposed methology identified by stakeholders were included in the final comment letter. 

Also, concerns were raised about the final status of the industry-based disclosure requirements. In case they were to become mandatory as a future step, EFRAG stressed the need for a robust technical process including preliminary public consultation.

The final comment letter can be found here



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