As predicted by Corporate Disclosures last week, the International Sustainability Standards Board voted at a meeting in Montreal yesterday (16 February) to reference the GRI and the EU sustainability reporting standards (ESRS) in its sources of guidance in IFRS S1 (General Sustainability-related Disclosures).
In the absence of a relevant IFRS disclosure standard, IFRS S1 will allow companies to use the GRI standard or ESRS to identify sustainability-related risks and opportunities and to prepare disclosures to adhere to the standard's objectives.
ISSB co-chair Jingdong Hua was the only board member to vote against the IFRS staff proposal to include both standards in the sources of guidance. Hua had already voiced scepticism at the proposal during an initial board discussion back in November.
He said his view hadn't changed since then, and explained he was voting against the proposal because "if we are the global baseline, then others refer to us rather than us referring to anybody else, it's a building block approach".
Back in November, Bing Leng had also been opposed to the proposal but he voted in favour of it at yesterday's vote. However he raised a concern that the number of standards referenced in the sources of guidance could grow over time.
Sue Lloyd said it was important it would be "explicit" that the inclusion of these other standards is to supplement the existing IFRS sustainability standards and not offer an alternative reporting.
She added that the was a precedent for this approach as the IASB refers to other standards which users may use if they cannot find a relevant reporting requirement in the IFRS accounting standards.