The IFRS Foundation and EFRAG have released guidance to demonstrate the alignment between the International Sustainability Standards Board’s (ISSB) IFRS Sustainability Disclosure Standards and the European Sustainability Reporting Standards (ESRS). This publication aims to help companies efficiently apply both sets of standards, particularly in climate-related disclosures. 

The document is designed to simplify the reporting process for companies adhering to both the ISSB Standards and ESRS, reducing complexity, fragmentation, and duplication. As global mandates for sustainability-related information increase, this guidance seeks to enhance transparency, comparability, and accountability. The guidance outlines the harmonization of key concepts such as materiality, presentation, and disclosures for sustainability topics beyond climate, and provides detailed information on aligning climate disclosures to help companies comply with both ISSB and ESRS standards. 

Commissioner for Financial Services, Financial Stability, and Capital Markets Union Mairead McGuinness praised the guidance, emphasizing the importance of interoperable reporting frameworks to reduce the burden on EU companies. EFRAG Sustainability Reporting Board Chair Patrick de Cambourg highlighted the commitment to international convergence in sustainability disclosures, particularly on climate and other critical matters. EFRAG’s Technical Expert Group Chair, Chiara Del Prete, noted that this guidance is a milestone for advancing interoperability and quality of sustainability-related data. 

ISSB Chair Emmanuel Faber stated that the goal is to provide globally comparable, decision-useful disclosures to inform investor capital allocation decisions. The collaboration with EFRAG enables companies to use the guidance for providing the global baseline while meeting the additional disclosure requirements within the European Union. ISSB Vice-Chair Sue Lloyd added that this interoperability guidance offers practical assistance to companies needing to understand how to apply both ISSB Standards and ESRS. 

This initiative reflects a significant step towards streamlined ESG and sustainability reporting, ensuring companies can efficiently manage their sustainability disclosures across different jurisdictions. 

Sources: 

https://www.ifrs.org/news-and-events/news/2024/05/ifrs-foundation-and-efrag-publish-interoperability-guidance/ 

https://viewpoint.pwc.com/dt/gx/en/pwc/in_briefs/in_briefs_INT/in_briefs_INT/efrag-and-issb-jointly-publish-interoperability-guidance.html