EFRAG's draft comment letter (DCL) on ISSB RFI on Agenda priorities

​​EFRAG is consulting and asks for comments by 25 July 2023 in response to the ISSB Request for Information (RFI) on its Agenda Priorities.Stakeholders can provide inputs to EFRAG's preliminary answers by way of an online survey that can be accessed here. Alternatively, EFRAG accepts comment letters submitted by using the Express your views page on EFRAG's website.Comments should be submitted by 25 July 2023.

​​The ISSB is asking for views on the strategic direction and balance of
its activities, the criteria for identifying research projects and which
projects should be prioritized. The feedback will help the ISSB to determine
its activities and workplan for 2024-2026.

In the draft comment letter EFRAG suggests the ISSB to put the emphasis on (i) a clear direction of travel
with a definition of the universe of sustainability-related information to be
ultimately covered and of the corresponding underlying concepts, (ii) the
priority to be given to interoperability in structure and content with other
sustainability reporting standards and (iii) connectivity to be included as a priority topic in the standard setting workplan, together with the topical standards.

EFRAG considers that the first priority of the ISSB should be the
beginning of new research and standard-setting projects including connectivity
between financial reporting and sustainability reporting.

The second priority should be supporting the implementation of
ISSB Standards IFRS S1 and IFRS S2 and researching targeted enhancements to the
ISSB Standards.

The last priority would be to
enhance the Sustainability Accounting Standards Board (SASB) Standards.

In selecting projects, EFRAG
recommends the ISSB to clarify the criterion "importance of the matter to investors" and explicitly integrate the
investors’ interest in impact materiality. EFRAG notes that a growing number of
investors base their investment decisions on information on impacts whatever
their direct or indirect relationship with sustainability-related risks and
opportunities that could reasonably be expected to affect the entity’s
prospects.  

EFRAG will not put forward a
prioritisation of the different research projects and the subsequent standards
to be developed, because it develops comprehensive standards in accordance with the CSRD. EFRAG disagrees with the approach to describe the
topic on biodiversity so broadly that it becomes all encompassing.

EFRAG applauds the intention of the ISSB to broaden its coverage to social topics. EFRAG further highlights the intrinsic links between human capital and human rights and cautions against unbundling these topics.

EFRAG considers that a project on
connectivity (not integration in reporting) should be given high priority to
develop guidance on connected information. 

Should
the ISSB start a project on integration in reporting, EFRAG agrees with the
ISSB with incorporating concepts from the IASB’s project on the Management Commentary
and the Integrated Reporting Framework. EFRAG recommends that the ISSB and IASB
further explore the similarities and differences between proposals in the Management Commentary Practice Statement ED and the Integrated Reporting
Framework and consider how the two frameworks could be further converged.

The
comment letter can be found here.
Comments are requested no later than 25 July 2023.

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