ISSB and EU to streamline sustainability reporting with new guidance material

More than half of UK-based sustainability professionals find reporting requirements too complex.

The guidance illustrates the alignment achieved between the International Sustainability Standards Board’s (ISSB) IFRS Sustainability Disclosure Standards (ISSB Standards) and the European Sustainability Reporting Standards (ESRS).

At its essence, this document aims to address the challenges encountered by companies when adhering to multiple reporting frameworks, such as complexity, fragmentation and duplication. By streamlining the process, the goal is to empower companies worldwide to disclose sustainability-related information in alignment with both ISSB Standards and ESRS.

A recent analysis found that ESG regulations globally have increased by 155% in the past decade, with 1,255 ESG regulations introduced worldwide since 2011. More than half of UK-based sustainability professionals find reporting requirements too complex.

ISSB’s vice-chair Sue Lloyd said: “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 guidance material provides practical insights into how companies can efficiently apply both sets of standards, particularly emphasising detailed analysis in climate-related disclosures.

According to the organisations, by simplifying complexities, companies utilising this guidance will be able to enhance transparency, comparability and accountability in their reporting practices.

Moreover, the guidance is anticipated to facilitate better collection, governance and control of decision-useful data for companies in the long term.

EFRAG sustainability reporting board chair Patrick de Cambourg said: “On the basis of our joint efforts, we are very happy to be able to issue this very practical guidance on interoperability illustrating in particular how ESRS embed the global baseline approach developed by the ISSB.

“It demonstrates EFRAG’s commitment to the much-needed international convergence of sustainability-related disclosures, on climate and other critical sustainability matters, and our full support to the global momentum in this crucial space.”