31 December 2021 year-end sustainability reporting update

31 December 2021 year-end sustainability reporting update

Sustainability reporting is a hot topic at the moment and 2021 has been a landmark year in the history of sustainability standards development. The demand for sustainability disclosures to be made by entities in a globally consistent manner has become a top priority for the investor community as well as various levels of government worldwide.

Historically, sustainability reporting standards have gone by many names such as non-financial reporting, ESG (environmental, social and governance) reporting, CSR (corporate and social responsibility) reporting, sustainability reporting, etc. and cover a variety of topics, including climate, emissions, pollution, social responsibility, governance and many others.

The various types of sustainability reporting have been addressed by numerous different standard setters; however, the standards have typically been non-mandatory and inconsistent in their requirements. This has resulted in ‘greenwashing’ where an entity may ‘cherry pick’ and disclose only information that casts its activities in a positive light, while ignoring others.

This fragmentation led to calls by many entities worldwide for the formation of a standard setter that can build on the work done by previous organisations and begin issuing a single set of globally consistent sustainability standards as a ‘global baseline’. Jurisdictions could then use that consistent baseline, and build additional requirements where considered necessary.

These calls culminated in the announcement of the formation of the International Sustainability Standards Board (ISSB) in November 2021 as a sibling board to the International Accounting Standards Board (IASB), both under the governance structure of the IFRS Foundation.

Please refer to our International Sustainability Reporting Bulletin for a ‘snapshot’ of sustainability reporting developments as at 31 December 2021, along with a summary of the major events that led to the formation of the ISSB, and an overview of what to expect in 2022.