General Requirements

Author

Shel

In addition to IFRS SDS1:

  1. an organisation should refer to and consider whether the disclosure topics in the SASB standards apply. The organisation might decide that those topics are not relevant to its situation.

  2. an organisation may also refer to and consider the relevance of:

    1. the CDSB Framework Application Guidance for water-related disclosures and the CDSB Framework Application Guidance for biodiversity-related disclosures (together called the ‘CDSB Framework Application Guidance’);

    2. the latest publications from other standard-setting bodies whose requirements aim to meet the needs of users of general purpose financial reports; and

    3. the sustainability-related risks and opportunities identified by other organisations operating in the same industry or geographical area.

An organisation should apply the IFRS SDS that specifically relates to a particular sustainability-related risk or opportunity. If there is no IFRS SDS that specifically applies to the sustainability-related risk or opportunity, the organisation should use judgement to identify information that:

  1. is relevant to the decision-making of users of general purpose financial reports; and

  2. provides a faithful representation of that sustainability-related risk or opportunity.

In making this judgement, the organisation should:

  1. refer to and consider the applicability of the metrics linked to the disclosure topics in the SASB standards. The organisation might conclude that these metrics are not applicable in its circumstances.

  2. refer to and consider the applicability of the following sources, provided they do not conflict with IFRS SDS:

    1. the CDSB Framework Application Guidance;
    2. the most recent pronouncements of other standard‑setting bodies whose requirements are designed to meet the information needs of users of general purpose financial reports;
    3. the information, including metrics, disclosed by organisations operating in the same industry or geographical region.
    4. the Global Reporting Initiative (GRI) standards; and
    5. the European Sustainability Reporting standards (ESRS).

If the organisation applies these standards without applying the requirements in IFRS SDS, it should not make an explicit and unreserved statement of compliance with IFRS SDS.

An organisation should identify:

  1. the specific standards, pronouncements, industry practices, and other guidance sources it has used to prepare its sustainability-related financial disclosures, including, if applicable, the disclosure topics in the SASB standards; and

  2. the industry or industries specified in the IFRS SDS, the SASB standards, or other guidance sources related to a particular industry or industries that the organisation has applied in preparing its sustainability-related financial disclosures, including when identifying applicable metrics.

The disclosures required by IFRS SDS should be part of an organisation’s general purpose financial reports.

There are several possible places within its general purpose financial reports where sustainability-related financial information can be disclosed. This information could be included in the organisation’s management commentary or a similar report when it is part of the general purpose financial reports. Management commentary or a similar report is required in many jurisdictions and may be known by various names, such as ‘management report’, ‘management’s discussion and analysis’, ‘operating and financial review’, ‘integrated report’, or ‘strategic report’.

An organisation may disclose information required by an IFRS SDS in the same place as information disclosed to meet other requirements, such as those required by regulators. The organisation should ensure that the sustainability-related financial disclosures are clearly identifiable and not hidden or confused with the additional information.

Information required by an IFRS SDS may be included in sustainability-related financial disclosures by referring to another report published by the organisation (cross-referencing). Cross-referencing should happen only if:

  1. the cross-referenced information is equally accessible and available at the same time as the sustainability disclosures; and

  2. using cross-references doesn’t make the complete set of sustainability disclosures harder to understand.

Cross-referenced information becomes part of the full set of sustainability-related financial disclosures and must meet all IFRS SDS requirements. This means it must be relevant, accurate, comparable, verifiable, timely, and understandable. The leadership responsible for approving the general purpose financial reports bears equal responsibility for cross-referenced information as for directly included information.

When including required information by cross-reference in sustainability-related financial disclosures:

  1. the disclosures should clearly name the source report containing the information and provide access instructions; and
  2. the cross-reference should identify the exact location within that report.

An organisation should report its sustainability-related financial disclosures at the same time as its related financial statements. The sustainability-related financial disclosures should cover the same reporting period as those financial statements.

Normally, an organisation prepares sustainability-related financial disclosures for a 12-month period. However, for practical reasons, some organisations may prefer to report for a 52-week period or similar. This standard does not prevent that practice.

When an organisation changes the end of its reporting period and provides sustainability-related financial disclosures for a period longer or shorter than 12 months, it should disclose:

  1. the period covered by the sustainability-related financial disclosures;
  2. the reason for using a longer or shorter period; and
  3. that the amounts disclosed in the sustainability-related financial disclosures are not fully comparable.

If, after the end of the reporting period but before the date the sustainability-related financial disclosures are approved for release, an organisation receives information about conditions that existed at the end of the reporting period, it should update the disclosures related to those conditions based on the new information.

An organisation should disclose information about transactions, other events, and conditions that happen after the end of the reporting period but before the sustainability-related financial disclosures are authorised for issue, if not disclosing that information could reasonably be expected to influence the decisions that primary users of general purpose financial reports make based on those reports.

To ensure timely reporting and cost efficiency, and to avoid repeating previously disclosed information, an organisation may provide less detail in interim sustainability reports compared to its annual disclosures. Interim sustainability disclosures serve as updates to the most recent annual sustainability financial information, focusing on new developments, events, and circumstances without repeating prior disclosures. While interim disclosures may be more concise than annual ones, an organisation remains permitted to publish complete sustainability disclosures as outlined in this standard within its interim financial reports.

This standard does not specify which organisations should provide interim sustainability-related financial disclosures, how often, or how soon after the end of an interim period. However, governments, securities regulators, stock exchanges, and accountancy bodies may require organisations with publicly traded debt or equity securities to publish interim general purpose financial reports.

Unless another IFRS SDS allows or requires otherwise, an organisation should disclose comparative information for the previous period for all amounts reported in the current period. If doing so would help users better understand the sustainability-related financial disclosures for the current period, the organisation should also provide comparative information for narrative and descriptive sustainability-related financial information.

Amounts reported in sustainability-related financial disclosures might relate, for example, to metrics and targets or to the current and anticipated financial effects of sustainability-related risks and opportunities.

When a metric’s reported amount is an estimate, if an organisation discovers new information about a prior period’s estimate that relates to conditions existing at that time, the organisation should:

  1. report an adjusted comparative amount incorporating this new information;
  2. show the difference between the original and adjusted amounts; and
  3. explain why the comparative amount was revised.

An organisation does not need to provide an updated comparative amount:

  1. if doing so would be impractical; or
  2. for forward-looking metrics. These metrics cover potential future transactions, events or conditions. The organisation may update comparative amounts for forward-looking metrics, as long as it doesn’t use hindsight.

When an organisation changes or replaces a metric during the reporting period, it should:

  1. provide an adjusted comparative amount, unless this is impractical;
  2. describe what changed; and
  3. explain why these changes were made, including how the new metric offers better information.

An organisation introducing a new metric during the reporting period should provide a comparative amount for that metric unless it’s impractical to do so.

Occasionally, adjusting a comparative amount to match the current reporting period isn’t practical. For instance, if prior period data wasn’t collected in a way that allows applying a new metric definition retrospectively, recreating the data may not be feasible. When such adjustments are impractical, the organisation must disclose this limitation.

An organisation whose sustainability-related financial disclosures comply with all the requirements of IFRS SDS should make an explicit and unreserved statement of compliance. The organisation should not describe its sustainability-related financial disclosures as complying with IFRS SDS unless they meet all the requirements of those standards.

This standard relieves an organisation from disclosing information that would otherwise be required by an IFRS SDS if disclosure is prohibited by law or regulation. It also relieves an organisation from disclosing information about a sustainability-related opportunity if that information is commercially sensitive. An organisation using these exemptions is still allowed to state that it complies with IFRS SDS.


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Footnotes

  1. IFRS Sustainability Disclosure Standards↩︎