The International Accounting Standards Board (IASB) released its Third Agenda Consultation Snapshot and Feedback Statement, outlining its priorities from 2022 to 2026. The Feedback Statement summarized feedback received from a 2021 public consultation, contributing, in large part, to shaping its priorities and work plan. The IASBs key strategic priorities include:

• Maintaining the strategic direction and balance of the IASB’s activities. These will remain largely the same, but in response to stakeholder feedback, they will increase “efforts in developing digital financial reporting and on improving the understandability and accessibility of IFRS Accounting Standards”.
• Completing current projects. This will include deliberations on current projects such as Primary Financial Statements, Goodwill and Impairment, as well others that will likely continue for the rest of 2022 and into 2023.
• Adding intangibles and cash flows to work plan. This will involve a comprehensive review of accounting requirements for intangible assets and review of the accounting requirements for the statement of cash flows and related matters.The IASB also identified areas where they can work in tandem with the International Sustainability Standards Board (ISSB) to create a “connected financial reporting package”.

Yesterday the International Financial Reporting Standards (IFRS) Foundation announced that it is establishing the International Sustainability Standards Board (ISSB). The purpose of the ISSB is “to develop global standards to improve the consistency, comparability and reliability of sustainability reporting.” The Basel Committee on Banking Supervision (Basel Committee) declared its endorsement for the ISSB; stated support for “the development of a consistent approach across sectors and minimising regulatory fragmentation”; and promised to “work on the Pillar 3 framework to promote a common disclosure baseline for climate-related financial risks across internationally active banks”.

The Basel Committee believes the ISSB’s mission coincides with its Pillar 3 goals related to climate-related financial risks and plans to analyze Pillar 3 to bolster these risks for a common disclosure baseline traversing all internationally active banks. In coordination with the IFRS Foundation, the Basel Committee intends on advance their analogous objectives by working with other international forums such as the Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS), “to ensure the prerequisites for a high-quality and globally consistent disclosure framework for climate-related financial risks are in place”.

More information on the Basel Committee’s collaboration with the ISSB can be found here.

In December of 2020, the IFRS requested comment on their Consultation Paper on Sustainability Reporting. The Trustees met on February 1, 2021 to review the responses to the first three questions in the consultation paper:

1. Is there a need for a global set of internationally recognised sustainability reporting standards? (a) If yes, should the IFRS Foundation play a role in setting these standards and expand its standard-setting activities into this area?
2. Is the development of a sustainability standards board (SSB) to operate under the governance structure of the IFRS Foundation an appropriate approach to achieving further consistency and global comparability in sustainability reporting?
3. Do you have any comment or suggested additions on the requirements for success as listed in paragraph 31 (including on the requirements for achieving a sufficient level of funding and achieving the appropriate level of technical expertise)?

Upon review of the feedback it was clear that there is a “growing and urgent demand to improve the global consistency and comparability in sustainability reporting, as well as strong recognition that urgent steps need to be taken and broad demand for the IFRS Foundation to play a role in this.“ As a response, the Trustees have committed to forming a Trustee Steering Committee, as well as continued analysis of the consultation responses to determine whether to establish a new board. It is expected that the Trustees will draft a proposal including a roadmap and timeline by the end of September 2021, with a possible announcement of a sustainability standards board at the United Nations Climate Change Conference in November 2021.

More information on the Trustee's meeting and sustainability efforts can be found here.

World Council's response to the IFRS' Consultation Paper on Sustainability Reporting can be found here.