ISSB continues its discussions on nature related disclosures

During this discussion, it was (tentatively) decided to adopt the term “environmental resources” instead of “environmental assets” and to define nature-related transition and physical risks, therefore clarifying the terminology and improving consistency in how these are described. 

Also discussed were sources of guidance in the context of disclosures which (tentatively) concluded in allowing entities to refer to and consider the applicability of the TNFD metrics where they support IFRS S1 objectives and do not conflict with ISSB standards or the Practice Statement. The ISSB also (tentatively) confirmed that the CDSB (Climate Disclosure Standards Board) Framework remains a valid source of guidance. 

It was (tentatively) agreed that the Practice Statement will be effective upon its issuance, with no requirement for comparative disclosures in the first year of application. 

It also clarified that entities must fully meet the requirements of both IFRS Sustainability Disclosure Standards (SDS) and the Practice Statement to claim compliance with these frameworks. In that sense, an entity would be prohibited from stating compliance of its sustainability-related financial disclosures under the Practice Statement, if not complying as well with all the requirements in IFRS SDS (though the ISSB is not proposing here to impose compliance with the Practice Statement as a condition of claiming compliance with IFRS SDS). 

Finally, two exemptions would be included in the Practice Statement, in line with paragraph 73 of IFRS S1 (possibility to omit required information on sustainability-related opportunity if commercially sensitive and possibility to omit required information if prohibited by law or regulation).