The International Sustainability Standards Board (ISSB) voted in favour of proposals by the IFRS technical staff for the content and timeline of its agenda priorities consultation and discussed the specific topics to cover at its board meeting in Montreal on Tuesday (18 October).
Greg Bartholomew presented the staff's recommendations for the ISSB's agenda priorities consultation. The key recommendation was to separate the priorities into two parts: work to build on the foundations of the draft sustainability standards (IFRS S1 and IFRS S2) and work on research and standard setting.
Furthermore, it recommended that the initial formal request for feedback focus only on research and standard-setting and not foundational work. The board voted unanimously in favour of this proposal.
The board also agreed to proceed with the proposed timeline, with the consultation documents on standard setting and research to be published in the first half of 2023, at the same time documents on foundational work will be published for transparency.
On foundational work, the topics would be: Improving the Sustainability Accounting Standards Board standards through internationalism and legacy projects, coordinating with the International Accounting Standards Board to ensure interoperability and compatibility and continuing research to enhance the standards and supporting the draft standards though capacity building, articulating core concepts and publishing the digital taxonomy.
The board voted in favour of proceeding with all these topics in the foundational work but added the caveat that the details of capacity building and digital taxonomy would need further discussions.
The staff also proposed that corporate governance disclosures be added to a short list of potential subject matters for prioritisation which would be finalised after feedback from stakeholders.
This was met with some scepticism from the board, Jeffrey Hales said that the topic of corporate governance was a very broad topic and the ISSB would need to clarify exactly what work it would be doing in this area.
Richard Barker argued that governance disclosures were effectively covered in the environmental and social disclosures which related to risks and opportunities and whether it was a part of sustainability reporting.
"The question here is whether governance in itself is a sustainability-related risk or opportunity," he said.
Vice-chair, Sue Lloyd reiterated the need for specifying exactly what would be covered in governance disclosure work and said that the ISSB would need to be able to justify how any corporate disclosures fell within its remit of sustainability reporting.
However, vice-chair Jindong Hua said: "Adding corporate governance to the long list (of potential priorities) is something I very much support."
He noted the need to define what was included in the "governance umbrella" but said that many issues in this area would affect sustainability, such as recruitment and procurement which could affect enterprise value.
