The International Sustainability Standards Board (ISSB) issued its first two sustainability reporting standards on June 26, 2023.
IFRS S1 - General Requirements for Sustainability-related Financial Disclosures and IFRS S2 - Climate-related Disclosures require information to be provided across four areas: Governance, Strategy, Risk Management, Metrics and Targets.
Organisations are therefore required to disclose material information for each of the four pillars. Information is material if its omission or misstatement could reasonably be expected to influence the decisions of primary users of the general-purpose financial report.
The objectives and information required for each of the pillars are as follows.
Governance—The objective of this pillar is for organisations to provide information to enable users to understand the governance process, controls, and procedures that organisations use to monitor, manage, and oversee sustainability-related risks and opportunities.
Organisations should also provide information on the governance body charged with oversight of sustainability-related risks and opportunities and management’s role in the process.
Strategy—This pillar aims to provide information to enable users to understand the organisation’s strategy for managing sustainability-related risks and opportunities.
It also includes information on current and anticipated effects, including the resilience of the organisation’s business model, value chain, financial position, and performance including cash flows.
Risk Management—The objective of this pillar is for organisations to provide information to enable users to understand the organisation’s process for identifying, assessing, prioritising, and monitoring sustainability-related risks and opportunities, which in turn assesses the organisation’s overall risk profile and risk management process.
Metrics and Targets—The objective of this pillar is for organisations to provide information to enable users to understand their performance in relation to their sustainability-related risks and opportunities, including progress towards any targets the entity has set and any targets the organisation is required to meet by law or regulation.
An organisation should disclose the metric used, the period covered, the base period, and any milestones or interim targets for each target.
Akinyemi Awodumila is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
