Sustainability Reporting

Discover a self-contained, authoritative guide to IFRS Sustainability Disclosure Standards Sustainability Reporting: A Guide for Professionals and Students offers focused guidance, with practical examples, designed to explain how entities can develop disclosures to inform investors. The authors introduce the context, purpose and requirements of IFRS Sustainability Disclosure Standards. They also demonstrate how to think about applying them in practice, covering a range of sustainability-related topics. Sustainability Reporting is designed to help readers think about: the purpose of IFRS requirements and how to apply them the importance of governance, strategy, risk management, and metrics and targets how to disclose information about climate-related issues how to develop disclosure for sustainability-related matters not addressed directly by IFRS Sustainability Disclosure Standards the role of controls and assurance how the Standards are designed to reflect evolving levels of expertise and availability of data how and why sustainability-related information is useful for investment decision-making Sustainability Reporting is written to complement the official and authoritative position of the IFRS Foundation, in particular IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. Perfect for accountants, sustainability professionals, investors, business leaders, directors, and others supporting or studying investor-focused financial reporting, Sustainability Reporting is an accessible guide to IFRS Sustainability Disclosure Standards.

About the Authors xiii PART I OVERVIEW OF THE ISSB AND IFRS S1 1 1 Introduction 3 1.1 Aims of the Book and Target Reader 7 1.2 Structure of the Book 9 1.3 Prerequisite Reading 10 2 Global Context 11 2.1 Evolution of the Sustainability Reporting Landscape 12 2.2 Market Practice 26 2.3 The Global Baseline and Interoperability 27 2.4 Conclusion 32 3 General-Purpose Financial Reporting and IFRS Sustainability Disclosure Standards 39 3.1 The Audience—The Primary Users of General-Purpose Financial Reports 40 3.2 Decisions Relating to Providing Resources to the Entity 43 3.3 IFRS Standards 44 3.4 Assurance 49 3.5 Conclusion 54 4 IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information 57 4.1 Objective and Scope 58 4.2 Sustainability-Related Risks and Opportunities 59 4.3 Core Content 66 4.4 Time Horizons 76 4.5 Materiality 80 4.6 Proportionality 84 4.7 Judgement and Measurement Uncertainty 86 4.8 Fair Presentation 90 4.9 A Complete Set of Sustainability-Related Financial Disclosures 91 4.10 Conclusion 93 PART II APPLYING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 97 5 Identifying Sustainability-Related Risks and Opportunities 99 5.1 How to Think About Sustainability-Related Risks and Opportunities 100 5.2 Relationship with an Entity's Business Model and Value Chain 105 5.3 Impacts and Dependencies 108 5.4 Summary 115 6 Governance 121 6.1 IFRS S1 Required Disclosures 121 6.2 Corporate Governance 123 .3 Governance of Sustainability-Related Risks and Opportunities 127 6.4 Management's Role 134 6.5 Effective Disclosure 135 6.6 Conclusion 136 7 Strategy 137 7.1 Sustainability-Related Risks and Opportunities 138 7.2 Current and Anticipated Effects 142 7.3 Resilience 168 7.4 Summary 173 8 Risk Management 175 8.1 Risk Management Disclosures 177 8.2 Sustainability-Related Risks and Opportunities 182 8.3 Conclusion 188 9 Metrics and Targets 191 9.1 Metrics 191 9.2 Targets 205 9.3 Disclosure 210 9.4 Revisions to Estimates and Correcting for Errors 219 9.5 Conclusion 225 PART III CLIMATE-RELATED AND OTHER DISCLOSURE REQUIREMENTS 231 10 IFRS S2—Climate-Related Disclosures 233 10.1 Relationship Between IFRS S1 and IFRS S2 234 10.2 Scope of IFRS S2 236 10.3 Governance 237 10.4 Strategy 238 10.5 Risk Management 247 10.6 Metrics and Targets 248 10.7 Conclusion 265 11 Other Topics and Activities 289 11.1 The Process 290 11.2 Topics 292 11.3 Case Study 1: Fashion Apparel—A Clothing Retailer 300 11.4 Case Study 2: Workplace Safety 308 11.5 Financial Effects 314 11.6 Conclusion 320 PART IV USING SUSTAINABILITY-RELATED FINANCIAL DISCLOSURES 321 12 Analysis and Use of Sustainability Disclosures 323 12.1 The Scope of Investor-Oriented Information 325 12.2 Decision-Useful Information 327 12.3 Communicating with Investors 332 12.4 Conclusion 339 13 Conclusion 341 13.1 An Interdisciplinary Issue 341 13.2 Estimation and Uncertainty 342 13.3 Materiality 343 13.4 Final Words 344 Notes 345 Index 349