The International Sustainability Standards Board (ISSB) is working towards establishing global standards for organizations to disclose their impact on the climate. It aims to combat “greenwashing” by companies that selectively adhere to sustainability standards. The ISSB, established in November 2021, brings together various standard-setters under the International Financial Reporting Standards Foundation. It rolled out the finalized versions of S1 General Requirements for Disclosure of Sustainability-related Financial Information and S2 Climate-related Disclosures on June 26th 2023.
Beyond climate, the board intends to expand into other areas such as biodiversity, human capital, human rights, and integration in reporting. The ISSB’s proposed standards align with the widely used framework of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures.
The Securities and Exchange Commission (SEC) is also expected to finalize its own climate-related disclosure rule in October 2023. Companies will need to navigate compliance with both the SEC rule and ISSB standards. Adoption of ISSB standards by jurisdictions will require coordination with officials globally, and talks have been initiated with various countries and continents. The ISSB is seeking to provide high-quality, globally comparable information on sustainability-related risks and opportunities to meet investor needs.
Mihir stated, “I can tell you that over 90% or 95% of Fortune 100 companies are doing some kind of sustainability reporting. It’s all voluntary. There is no mandate from anyone. That’s what the SEC proposal is all about… The whole purpose of why the ISSB was even established is to provide that standardization to the investors and the other shareholders, especially of large companies, to make sure that there’s comparability between what companies are reporting.”
How Centri Can Help
Statements and reports published by companies regarding their ESG goals, targets, and achievements are attracting increased scrutiny from stakeholders and regulators alike. With the SEC rule changes on the horizon, companies should act now to adapt to the anticipated regulatory requirements.
Whether your business has an ESG program in place or is in the process of developing an ESG strategy, or if you are a Board Member, Head of Sustainability, or Finance personnel in charge of ESG initiatives at your company, our team will provide you the guidance to confidently move forward with your ESG journey. Contact us to learn more.
Mihir Jhaveri, CPA, CIA, CISA, CFE, CITP, CGMA
Managing Director | ESG Practice Leader
Mihir is a Managing Director and ESG Practice Leader at Centri. He has over 15 years of experience helping large Fortune 500 publicly-traded and private companies drive process improvement, minimize company risks, and enhance corporate governance. He has significant experience managing audits and advisory projects, including Sarbanes-Oxley (SOX) 404 Compliance, financial, operational, IT, and system implementation reviews.
About Centri Business Consulting, LLC
Centri Business Consulting provides the highest quality advisory consulting services to its clients by being reliable and responsive to their needs. Centri provides companies with the expertise they need to meet their reporting demands. Centri specializes in financial reporting, internal controls, technical accounting research, valuation, mergers & acquisitions, and CFO and HR advisory services for companies of various sizes and industries. From complex technical accounting transactions to monthly financial reporting, our professionals can offer any organization the specialized expertise and multilayered skillsets to ensure the project is completed timely and accurately.
For more information, please visit www.CentriConsulting.com
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