Developers of global sustainability disclosure standards to help investors understand how companies connect sustainability and value want feedback to make sure they are internationally applicable, the International Sustainability Standards Board said Thursday in a news release.
The ISSB standards go into effect in January 2024. A general sustainability-related disclosures standard, S1, will describe sustainability as a company's ability to sustainably maintain resources and relationships, and manage its dependencies and impacts within its whole business ecosystem over the short, medium and long term.
A second standard, S2, will address corporate disclosure about climate, also in the context of a company's value creation.
The standards will be based on a framework developed by the Task Force on Climate-related Financial Disclosures for assessing and reporting on the financial risks of climate change within portfolios. They build on existing SASB Standards that are now maintained by the ISSB.
Roughly 20% of the metrics in the SASB Standards incorporate references to specific jurisdictional laws and regulations, so revising them "will help improve international applicability," the news release said.
The SASB Standards are already being applied by more than 2,700 companies in more than 70 jurisdictions around the world, including 72% of the S&P Global 1200 index, the release said. Jeffrey Hales, chairman of the ISSB's SASB Standards Board Advisor Group, said in the release that more companies are voluntarily applying the SASB Standards because investor demand "sends a strong signal about the information investors need."
The consultation is aimed at making it easier for companies to apply the SASB Standards regardless of where they operate, Mr. Hales said.
Comment letters will be posted publicly, and the comment period ends Aug. 9.