The International Sustainability Standards Board (ISSB) has published the IFRS Sustainability Disclosure Taxonomy (ISSB Taxonomy), enabling investors and other capital providers to analyse sustainability-related financial disclosures efficiently.
The Taxonomy has been developed to help support dialogue between companies and investors. Informed by market feedback, the Taxonomy enables companies to consistently tag information prepared using ISSB Standards. But, crucially, it does not introduce new requirements or affect a company’s compliance with the Standards.
The use of the ISSB Taxonomy by businesses should enable investors to search, extract and compare sustainability-related financial disclosures, according to the ISSB, as it establishes its global baseline of standards.
Designed to be consistent with the IFRS Accounting Taxonomy so that companies can provide a holistic digital financial reporting package to investors, the ISSB Taxonomy can also be used with other digital taxonomies.
The Taxonomy reflects IFRS S1 general requirements for disclosure of sustainability-related financial information and IFRS S2 climate-related disclosures, as well as their accompanying guidance.
ISSB chair, Emmanuel Faber (pictured), said: “As jurisdictions around the world are considering the adoption or other use of ISSB Standards, the publication of the ISSB Taxonomy only a few months after the effective date of our inaugural Standards is critical to support capital market transparency and efficiency, and enable companies and investors to digitally process sustainability-related financial disclosures provided through use of the ISSB Standards.
“Furthermore, we have taken steps to ensure the ISSB Taxonomy can help facilitate interoperability with other taxonomies when necessary – for example, to facilitate interoperability with the taxonomy being developed by EFRAG – enabling all companies and investors to immediately more effectively identify disclosures required by the ISSB.”
This story first appeared in our sister publication, PA Future.