On 2 May 2024, the International Financial Reporting Standards (IFRS) Foundation and European Financial Reporting Group (EFRAG) together published a guidance for companies complying with both ISSB and CSRD sustainability reporting standards.
The IFRS Foundation and EFRAG are organizations that set international standards for sustainability reporting. The ISSB (International Sustainability Standards Board) standards were released in June 2023, in the goal to develop IFRS disclosure standards. The ESRS (European Sustainability Reporting Standards) standards, developed by EFRAG, were adopted by the European Commission in 2023, setting out requirement under the EU’s Corporate Sustainable Reporting Directive (CSRD). Both standards are expected to be mandatory for companies in the next few years.
The ISSB standards are designed to be a baseline global set of sustainability reporting standards. The ESRS standards are more comprehensive and build on the ISSB standards, including industry-specific requirement.
“We recognise the call to deliver efficiencies for companies that will be required—or choose—to apply both ISSB Standards and ESRS. As jurisdictions around the world move to adopt or otherwise use ISSB Standards, we expect this interoperability guidance will provide practical help to companies needing to understand how to apply the respective requirements of both ISSB Standards and ESRS.”
The new guidance from the IFRS Foundation and EFRAG is intended to help companies comply with both sets of standards by reducing complexity and providing a clear mapping between the two. This will help companies to avoid duplication of effort and reduce the cost of compliance, driving up the quality and comparability of sustainability reporting.
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