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ISSB Prepares Ground for Nature, Human Capital Standards

The International Sustainability Standards Board (ISSB) has initiated projects to research disclosure on risks and opportunities associated with biodiversity, ecosystems and ecosystem services, and human capital. The projects will focus on the information needs of investors in assessing whether and how these risks and opportunities could affect companies. ISSB’s decision followed a consultation on future priorities that took place in March this year. As with its two inaugural standards, it will consider building from relevant pre-existing initiatives. This could include leveraging standards and guidance from bodies incorporated into the ISSB, such as the Sustainability Accounting Standards Board (SASB), as well as relevant aspects of the work of the Taskforce on Nature-related Financial Disclosures (TNFD). General disclosure of material information about sustainability-related risks and opportunities is already required under the International Financial Reporting Standards’ Standard 1 (IFRS S1). Companies are also asked to refer to sources of guidance, including the SASB standards, to provide disclosures beyond the climate-related information required under IFRS S2. The new projects will enable the ISSB to embark on its own standard-setting work in key areas needed to establish more specific disclosures to build out the global baseline of sustainability-related financial disclosures, it said. The ISSB will also assess the limitations of current disclosures in these areas before deciding whether to develop new standards, but said it would not embark on projects related to risks and opportunities associated with human rights, based on market feedback. In a separate statement, the TNFD welcomed the ISSB’s decision to commence work on nature-related issues drawing on its recommendations. “This is another important step forward to realising both the need for an integrated global baseline for sustainability reporting and the aspirations of the Global Biodiversity Framework,” said TNFD Co-chair David Craig.

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