The International Sustainability Standards Board (ISSB) published the IFRS Sustainability Disclosure Taxonomy (ISSB Taxonomy) this week, providing the pathway for sustainability reporting to be taken up a notch in terms of clarity, efficiency, and utility.

By using the new ISSB Taxonomy, companies can ensure that their disclosures are available for digital comprehension and analysis, enabling data providers, investors, regulators and other users to efficiently search, extract, and compare sustainability-related financial information.

The Taxonomy aligns with IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, IFRS S2 Climate-related Disclosures, and associated guidance, ensuring consistency and clarity in reporting. As our readers will understand, the taxonomy does not introduce any new requirements, but adds a significant layer of utility to the standards that the ISSB has already published.

ISSB Chair, Emmanuel Faber, emphasised the pivotal role of the ISSB Taxonomy in enhancing market transparency and facilitating digital processing of sustainability-related financial disclosures. He highlighted the Taxonomy’s compatibility with other digital taxonomies (including the European Sustainability Reporting Standards Taxonomy, see below), enhancing interoperability and facilitating efficient identification of ISSB-required disclosures.

The ISSB Taxonomy marks a significant step forward in advancing the utility of sustainability reporting standards, paving the way for companies and investors to navigate through the evolving landscape and increasing quantity of ESG data effectively.

Stay tuned for an upcoming webcast in May by the IFRS Foundation, providing insights into the ISSB Taxonomy and its benefits.