The International Sustainability Standards Board (ISSB) is seeking feedback on its priorities for the next two years and has launched its Request for Information: Consultation on Agenda Priorities.

The objective of the agenda consultation is to ask stakeholders interested in sustainability-related financial reporting for their views on three areas: 

• the strategic direction and balance of the ISSB’s activities; 
• the suitability of criteria for assessing which sustainability-related matters (including topics, industries and activities) to prioritise and add to the ISSB’s work plan; and 
• a proposed list of new research and standard-setting projects that could be added to the ISSB’s work plan.

Unlike its sister board, the International Accounting Standards Board (IASB), which usually consult on agenda priorities every five years, the ISSB has opted to consult on a two-yearly basis, reflecting the fast pace of development in the sustainability reporting arena and acknowledging the need to remain flexible.

Strategic direction and balance

Within this area, the ISSB is asking respondents to prioritise the following list of activities:

• beginning new research and standard-setting projects; 
• supporting the implementation of the ISSB's first two Standards;
• researching targeted enhancements to the ISSB Standards; and
• enhancing the Sustainability Accounting Standards Board’s (SASB) Standards.

The diagram below is used within the ISSB’s Agenda Consultation to help illustrate an overview of the ISSB’s activities and the extent to which they interact and overlap:

Respondents are also asked whether any other activities should be included within its scope.

The ISSB’s ability to accommodate new research and standard-setting work will be constrained initially by those activities to which it is already committed. This includes activities such as ensuring connectivity between ISSB and IASB requirements, ensuring interoperability with other sustainability standards and engaging with stakeholders. 

The ISSB has now issued IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, the first two IFRS Sustainability Disclosure Standards. Some stakeholders may feel that supporting the implementation of these standards is of the utmost importance, to ensure the core concepts that underpin the ISSB Standards are well understood and that any implementation challenges identified are adequately addressed.

The final two activities that respondents are asked to prioritise relate to research and consultation to assess areas for targeted enhancements to both the ISSB Standards and the SASB Standards. The SASB Standards play an important role in both IFRS S1 and IFRS S2 as they are the foundation for ISSB’s industry-based guidance and an entity must refer to them.

Suitability of criteria 

The ISSB is asking stakeholders whether the seven criteria it has identified (listed below), for assessing which sustainability-related matters to prioritise, are suitable:

1. The importance of the matter to investors.
2. Whether there are any deficiencies in the way companies disclose information on the matter.
3. The types of companies that the matter is likely to affect, including whether the matter is more prevalent in some industries and jurisdictions than others.
4. How pervasive or acute the matter is likely to be for companies.
5. How the potential project interconnects with other projects in the work plan.
6. The complexity and feasibility of the potential project and its solutions.
7. The capacity of the ISSB and its stakeholders to progress the project in a timely way.

Importantly, the ISSB evaluates a new project for its work plan primarily by determining whether the project will meet the information needs of investors in making decisions about providing resources to an entity. The criteria set out above are very similar to those used by the IASB in its most recent agenda consultation and are the primary consideration for determining project priority. However, given the importance of interoperability, the ISSB also considers the work streams of other sustainability standard-setters and framework providers.

Proposed new research and standard-setting projects

Within this third and final area, having conducted initial research into the information needs of investors, the ISSB is seeking feedback on four potential projects:

• Three research projects on sustainability-related risks and opportunities associated with:
• biodiversity, ecosystems and ecosystem services;
• human capital; and
• human rights.
• One research project on integration in reporting, to explore how to integrate information in financial reporting beyond the requirements related to connected information in IFRS S1 and IFRS S2.

All four potential projects are considered by the ISSB to be large projects, meaning it is unlikely it will have the capacity to deliver ISSB Standards on, or even significantly advance, all of the projects as part of a two-year work plan. The ISSB is keen to understand the relative level of priority of each of the projects however, and also if stakeholders have a view as to whether the projects should be pursued sequentially or concurrently. Where a project is prioritised, it may lead to future ISSB Standards depending on the findings and outcomes of research.

As part of the request for information, the ISSB is asking respondents to comment on lists of subtopics that sit within the proposed projects, as well as the similarities and differences that different industries, sectors or geographies may face when reporting under each topic.

Next steps

The comment period for the consultation closes on 1 September 2023 and the ISSB expects to deliberate the feedback received and publish a summarising statement in early 2024. 

ICAEW will be responding to the ISSB’s consultation on Agenda Priorities. If you would like to contribute any views or comments, please get in touch by emailing crf@icaew.com.

Laura Woods, Technical Manager, ICAEW