Proposed sustainability standards board needs greater clarity says ACCA

The International Sustainability Standards Board (ISSB) is welcome but it needs to provide greater clarity over the scope of its standards says the Association of Chartered Certified Accountants (ACCA)

In response to the proposal draft by the IFRS Foundation released in April to create an International Sustainability Standards Board (ISSB) to set IFRS sustainability standards, ACCA state that the current name of the proposed board does not reflect the intended scope of the future standards.

The accountancy body states that the current name of the board risks giving confusing messages, unrealistic expectations and inaccurately represents the intended work of the board.

ACCA also says that it supports the IFRS Foundation’s proposal for the new board to have an investor focus, but recommends that the Foundation defines the meaning of the terms ‘enterprise value,’ ‘sustainability,’ and the reference to ‘reporting’ in the context of the standard-setting proposals more clearly so that it is understood by stakeholders globally.

ACCA calls on the new board to produce a conceptual framework for non-financial reporting and the first climate disclosure standard as early as possible, to make sure that the international standards provide a consistent global baseline to jurisdictional disclosure needs.

Yen-pei Chen, corporate reporting and tax manager, ACCA said: ‘In ACCA’s view, there’s a need for a global baseline of standards on a wide range of topics, extending beyond financial performance and position, but equally beyond environmental or social impact. ‘

‘They include intangibles not recognised on the balance sheet, such as innovative processes, know-how and corporate culture as represented by the six interconnected capitals in the International Integrated Reporting Framework.’

ACCA agrees that members of this new board have professional backgrounds that reflect a diverse range of expertise and roles. It says that the Foundation should also consider the need for expertise outside of traditional capital markets.

Yen-pei Chen continued: ‘As a global professional body, we also want to see the composition of the Trustees and Advisory Council more actively reviewed. The geographical make-up of the Monitoring Board may also need change, to ensure that Africa and South Asia are appropriately represented.’

It also calls for an international multilateral mechanism for assessing equivalence and maintaining consistency between different jurisdiction-specific disclosure requirements, to ensure comparability and minimise undue reporting burden.

ACCA suggests that this should be overseen by an international organisation with competence in achieving multilateral consensus, such as the Organisation for Economic Co-operation and Development (OECD).

ACCA also touches on funding stating ‘as additional funding is critical to both the new board and the IASB’s ability to deliver their objectives’ it would welcome further communication from the IFRS Foundation about its plans to secure additional separate funding for the new board.

Yen-pei Chen concludes: ‘Although this may not need to be reflected in the Constitution, close collaboration between the IASB and the new board will be crucial. We encourage the IFRS Foundation to consider developing a conceptual framework for corporate reporting as a whole, thus strengthening the link between financial and non-financial reporting.’

ACCA response: Exposure Draft: Proposed targeted amendments to the IFRS Foundation to accommodate an International Sustainability Standards Board to set IFRS Sustainability Standards

Croner-i Navigate provides guidance, commentary and tools to assist with international financial reporting requirements. See the IFRS Quick Link, latest exposure drafts and Navigate IFRS Accounting for a selection of these resources.

Ruby Flanagan |Reporter, Accountancy Daily

Ruby Flanagan is reporter on Accountancy Daily. Contact her on

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