Hello Ilya,
It's taken a little time to consolidate my notes. Here is my summary from the meeting. Some repeats of things we've heard before but there certainly seems to be movement and the anticipation that between this meeting and next year's there will be a lot of change. Let me know if you need anything clarified as there was a little repetition in the sessions and sadly not the opportunity to ask questions in the forum.
IFAC (International Federation of Accountants) has been instrumental in supporting the adoption of ISSB (International Sustainability Standards Board) standards globally. Both organizations emphasize the importance of collaboration and step-by-step progress in implementing sustainability reporting standards globally. ISSB mentioned a guide being released later in the week that is intended to provide clarity for companies looking to voluntarily adopt or apply the ISSB standards, even if they are not yet required to do so by their local regulators. (It was released on Wednesday )– here is the link: https://www.ifrs.org/content/dam/ifrs/supporting-implementation/issb-standards/issb-voluntary-application-preparers.pdf
The EU Corporate Sustainability Reporting Directive (CSRD) is bringing mandatory sustainability reporting and assurance for many companies. They shared some of the challenges they see companies are facing in preparing for sustainability reporting. They are coming across resource constraints and capacity building needs as well as managing data collection. Navigating the evolving standards and regulations across jurisdictions is also seen as a big challenge as well as the transition from limited to reasonable assurance which will need significant improvements in companies' systems and controls.
In the US, there's a strong voluntary sustainability reporting and assurance market, with potential mandatory requirements coming from SEC rules and state-level legislation like in California but no insight into what is happening with SEC rules and when.
Investors should expect a high number of modified audit opinions in the first years of mandatory sustainability reporting and assurance. Assurance plays a crucial role in mitigating greenwashing but is not a complete solution; it enhances data reliability and reporting quality. Sustainability reporting is not just about compliance, but about future-proofing your business and communicating value creation to investors and stakeholders.
The International Ethics Standards Board for Accountants (IESBA) talked a little about how Ethics standards are crucial for building trust in sustainability reporting and assurance, complementing existing reporting and assurance standards.
They are developing three sets of ethics standards with the aim of being framework-neutral and interoperable with various sustainability reporting frameworks. The plan is to get these approved in December. The three standards will be for 1) sustainability reporting, 2) sustainability assurance and 3) the use of experts in sustainability.
The ISSB's focus for the next two years is supporting the adoption and implementation of their standards globally. They also shared where preparers are facing challenges, particularly in navigating multiple frameworks and standards but also implementing new processes and systems in a rapidly changing environment and managing the internal change needed within and across organizations.
There were presenters from Canada and Brazil. Canada is considering factors like proportionality for small businesses, natural resource sector impacts, and indigenous knowledge integration. Brazil is taking a collaborative approach, involving the accountancy profession and regulators in the adoption process.
The shift from voluntary to mandatory reporting is a key challenge, along with the introduction of assurance requirements. Companies are grappling with the different materiality concepts (financial vs. double materiality), potential increased litigation risks due to more extensive disclosures and the need for robust data management and control systems.
There's a call for clearer guidelines on the transition from limited to reasonable assurance across frameworks but no real specifics were discussed.
Not much talk about jurisdictions aside from the global baseline approach of ISSB standards allows for jurisdictional tailoring while maintaining comparability.
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Jackie Oppenheim
SVP Membership & Community
IMA
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Original Message:
Sent: 09-27-2024 03:52 PM
From: Ilya Ilienko
Subject: What would you want to know from this event?
How was it, anything interesting, any material you can attach here? Or more of the same-ol-same-o?
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Ilya Ilienko, dual MBA, CPA, CMA
Board Member / Director
East Coast - United States
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Original Message:
Sent: 09-23-2024 07:28 AM
From: Jackie Oppenheim
Subject: What would you want to know from this event?
Thanks for sharing your thoughts Ilya and yes, I'll be sure to post a summary of takeaways!
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Jackie Oppenheim
SVP Membership & Community
IMA
Original Message:
Sent: 09-20-2024 08:23 PM
From: Ilya Ilienko
Subject: What would you want to know from this event?
🌱 Thanks for sharing this, Jackie! The event looks like a great opportunity to dive into the latest in sustainability-related disclosures, especially with such prominent global leaders involved. Here are a few thoughtsies that are floating in my head:
Adoption & Implementation I'd love to know how the panelists see the voluntary adoption of IFRS Sustainability Disclosure Standards progressing. What are the main challenges, and how do they envision smaller companies integrating these standards into their reporting? 📊 These integrations and implementations have been going on for a while now, I believe, some years now . . .
Investor Perspective Are there any specific expectations from investors or capital markets regarding the transparency and comparability of sustainability disclosures, particularly around climate risks? Climate and sustainability have been a cause of headaches for some, no?
AI Integration I'm curious if the speakers will touch on how emerging technologies, like AI, can help streamline the reporting process and improve data accuracy. (Ahmad Jumah, who's been focusing on #ai in finance, always has awesome thoughts!) 🤖
Looking forward to hearing your excellent thoughts and takeaways, Jackie! 🌍 Be sure to post how it went pls!!!
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Ilya Ilienko, dual MBA, CPA, CMA
Board Member / Director
East Coast - United States
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