The International Sustainability Standards Board proposed Thursday to make the standards it inherited from the Sustainability Accounting Standards Board last year more applicable across the globe.
SASB has been developing sustainability accounting standards since it was founded in 2011 in San Francisco. SASB later merged with the International Integrated Reporting Council to form the Value Reporting Foundation in 2021, but they and the Climate Disclosure Standards Board later agreed to be consolidated into the ISSB in 2022, as a way to harmonize environmental, social and governance standards. The ISSB is overseen by the International Financial Reporting Standards Foundation, which also oversees the International Accounting Standards Board.
While SASB standards were used by many multinational companies, the rules were originally oriented to U.S. businesses. The language was translated from English into Spanish, French, Japanese and German. A small subset of the metrics included in the SASB standards — around 20% — incorporate references to specific jurisdictional laws and regulations. Revising these references will help improve international applicability and remove regional bias.
The ISSB released an exposure draft Thursday seeking feedback on a proposed methodology for enhancing the international applicability of SASB standards. The consultation is open for comments, preferably through an online survey, until Wednesday, Aug. 9, 2023.
Feedback on the proposed methodology will enable the ISSB to make targeted amendments to the SASB standards to make sure references within them are internationally applicable.
“The increase in companies around the world voluntarily applying the SASB standards in response to investor demand sends a strong signal about the information investors need,” said Jeffrey Hales, chair of the ISSB’s SASB Standards Board Advisor Group, in a statement Thursday. “The ISSB is committed to maintaining and enhancing the SASB Standards so that they continue to be effective in supporting companies to deliver industry-based sustainability disclosures to investors. Through this project, we hope to make it easier for companies to apply the SASB Standards regardless of where they operate and to help companies applying IFRS S1 produce comparable and decision-useful disclosures.”
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The ISSB’s goal is to revise the metrics within the SASB Standards, based on the outcomes of the consultation, prior to the ISSB’s general sustainability requirements standard IFRS S1 taking effect in January 2024.
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