SAICA Launches the ISSB Standards in South Africa
As the concept of sustainability gains traction across various industries, there has been a growing need to streamline the multitude of guidelines that often hinder the impact of sustainability reporting. The International Sustainability Standard Board’s (ISSB) launch of global standards (IFRS 1 and IFRS 2) is a groundbreaking shift to improve the effectiveness of sustainability reporting.
After nearly two years of development, these standards stand as a pinnacle in disclosures related to climate and various sustainability matters. They effectively eliminate the confusing set of guidelines and organisational structures that previously existed. With these new standards, companies must provide sustainability-related information along with their financial statements.
Launch of SAICA ISSB Standards
ISSB Chair Emmanuel Faber officially launched the standards during the IFRS Foundation’s annual conference in London on June 26, 2023. This launch marks a new era of reporting and provides a common language for businesses to communicate their commitment to sustainable practices.
Need for ISSB Standards
Every person globally maintains a degree of connectivity, whether through involvement in supply chains, investment in organisations, or participation in pension funds. This connectivity holds significance as it involves one’s assets and contributions, necessitating transparent reporting on these aspects. Whether in labour or manufacturing, individuals must understand the sustainability impact they exert. This extends beyond mere business concerns and encompasses the interest of every individual.
The global financial markets must understand the value embedded within sustainability data. By utilising the S1 and S2 standards, investors can accurately appraise companies, enabling more efficient, effective, and sustainable capital allocation. This, in turn, contributes to upholding public policy commitments for achieving net zero emissions and meeting sustainable development goals.
Benefits of ISSB Standards
IFRS S1 serves as the core baseline for sustainability reporting, aiming to unify disclosures related to waste and emissions. On the other hand, IFRS S2 delves deeper into specific subjects, notably focusing on climate mitigation and climate adaptation. The benefits of these standards include:
- Better Decision-Making: The ISSB standards will help solidify financial reporting frameworks and allow companies to report their risks, opportunities, and metrics in line with governance rather than just disclosures. As a result, it helps investors make investment decisions and unlock capital flows.
- Robust Reporting System: Earlier, there were 300-600 reporting initiatives. To tackle this issue, ISSB has built a global baseline for sustainability standards that helps with a robust reporting system. It offers information to support investor decisions, be cost-effective, and allow a transparent reporting process.
Bottom Line
With the launch of ISSB standards, it is time to adopt sustainability reporting in South Africa. To enable an easy transition, entities must report only on climate-related risks and opportunities in the first year. Reporting on other sustainability-related risks and opportunities will begin in the second year. Looking for a trusted partner to help you adopt ESG reporting? Enter DataTracks…
With 18+ years of experience, DataTracks is the pioneer in compliance reporting for CIPC filing. The experts at DataTracks stay abreast with the latest CIPC regulations and are well-equipped to handle the new CIPC ESG reporting mandate. So if you are looking to file error-free ESG reports without any delay, contact a DataTracks expert TODAY! You can call +27-10-446-9061 or e-mail enquiry@datatracks.co.za to know more about DataTracks sustainability reporting services.