International Updates

Latest International Updates

14 April 2022

ISSB publishes proposals for Climate-related disclosures

The International Sustainability Standards Board (ISSB) has recently published its first two proposed IFRS Sustainability Disclosure Standards which when final, will form a comprehensive global baseline of sustainability disclosures designed to meet the information needs of investors when assessing enterprise value.  The proposals for Climate-related Disclosures will establish disclosure requirements for climate‑related risks and opportunities.

Emmanuel Faber, the Chair of the ISSB introduces the proposals in a short video here.

For those of you short on time, there is a handy snapshot document here.

Overview of the ISSB Proposals

The two proposed standards are IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.

IFRS S1 applies to all sustainability topics not just climate. This means that from day 1 even in the absence of the other ISSB Standards, entities would have to follow a high-level framework for disclosing information about all sustainability topics that are material to them.

IFRS S2 is the ‘climate’ standard and is to be applied in conjunction with IFRS S1. IFRS S2 proposes requiring an entity to disclose information that would enable an investor to assess the effect of climate-related risks and opportunities on its enterprise value.

The draft standards build on the prototypes previously published by the IFRS Foundation’s Technical Readiness Working Group (TRWG).

The requirements in IFRS S2 are consistent with the four recommendations and 11 recommended disclosures published by the Task Force on Climate-related Financial Disclosures (TCFD). IFRS S2 does include some additional specific disclosures for example, in requiring disclosure of industry-based metrics relevant to an entity’s industry and activities.

The ISSB consultation

The ISSB’s consultation is open for comment until 29 July 2022. The ISSB plans to issue the standards before the end of 2022 when they will be available for immediate voluntary adoption.

The ISSB asks for submission letters, or survey responses. Note that the ISSB has set up separate consultation platforms for each exposure draft.

The XRB Board will be responding to the request for comments. If you do submit on the proposals, please send a copy of your submission letter to the XRB Board at

To read the ISSB’s proposals in full:

ISSB - Climate-related Disclosures consultation

ISSB - General requirements for Sustainability-related Disclosures consultation

Previous Update

New US Securities and Exchange Commission climate proposals 

This week, the United States Securities and Exchange Commission (US SEC) released their proposed framework for mandatory climate-related disclosures for public consultation. 

Similar to the XRB’s mandate to deliver a climate-related disclosure framework for Aotearoa New Zealand, this proposal aims to ensure both domestic and foreign entities are disclosing climate-related information, including financial risks and climate related metrics, in their US financial statements.  

Overview of the US SEC proposals  

The proposal requires registrants to disclose: 

  • Governance of climate-related risks and relevant risk management processes; 
  • The number of climate-related risks that have or are likely to have, a material impact on its business and consolidated financial statements over the short, medium, or long-term; 
  • How any identified climate-related risks have affected or are likely to affect strategy, business model, and outlook; 
  • The process for identifying assessing and managing climate related risks; 
  • The impact of climate-related events (severe weather events and natural conditions) and transition activities on the line items included in the consolidated financial statements, as well as on the financial estimates and assumptions used in the financial statements; 
  • Scope 1 - Direct greenhouse gas (GHG) emissions and Scope 2 indirect GHG emissions from purchased electricity or other forms of energy; 
  • Scope 3 - Disclose GHG emissions from upstream and downstream activities in its value chain if material or if the registrant has set a GHG emission target or goal that includes scope 3 (noting that smaller registrants are excluded from scope 3 emissions disclosures); and 
  • Climate-related targets or goals, and any transition plan, if any. 

Close alignment to NZ’s proposed disclosures 

As with New Zealand, SEC’s proposals are modelled on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). This includes the same four key areas of Governance, Risk Management, Strategy, and Metrics and Targets, as well as drawing on the GHG Protocol. This is similar to the proposals made by the IFRS Foundation’s Technical Readiness Working Group (TRWG). (See here for a comparison between the XRB, TCFD and TRWG disclosures). 

Key differences 

There are minor differences between the XRB’s proposals and those of the US SEC. Included in the US SEC disclosures are:  

  • The addition of the qualifier ‘if used’ on many of the disclosures 
  • A phase-in period for scope 3 emissions disclosures (including for smaller companies) up to fiscal year 2025 for some entities 
  • An explicit requirement for a direct link between climate disclosures and financial statements: “the impact of climate-related events (severe weather events and other natural conditions) and transition activities on the line items of a registrant’s consolidated financial statements, as well as on the financial estimates and assumptions used in the financial statements” 
  • A requirement to disclose about offsets and renewable energy certificates: “If carbon offsets or renewable energy certificates (“RECs”) have been used as part of the registrant’s plan to achieve climate-related targets or goals, certain information about the carbon offsets or RECs, including the amount of carbon reduction represented by the offsets or the amount of generated renewable energy represented by the RECs” 

The consultation 

The US SEC consultation is open for comment until 20 May 2022. If approved the US SEC intends to implement these changes to reporting from 2024. 


To read the proposal in full, click here.  

IAASB responds to increased demand for assurance engagements on sustainability and ESG reporting

 The IAASB have recently announced that they will dedicate capacity and resources to the assurance of sustainability/ESG reporting.

 Information gathering and research activities to determine future IAASB action has commenced in January this year, with initial work underway to determine scope and timing. The IAASB have also signalled a strong commitment to collaborate with key stakeholders globally, including the standard-setting and regulatory communities.

Their consultation could lead to:

  • Development of new subject-matter specific standard(s) that build on and supplement ISAE 3000 (Revised);
  • Targeted enhancements to ISAE 3000 (Revised), as necessary; or
  • Revising existing guidance or developing new guidance. 

In 2021, we published the IAASB’s comprehensive guidance to support application ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements along with  a navigation tool to help point users to relevant chapters.