Last month’s release of the International Sustainability Standards Board’s inaugural standards for sustainability-related and climate-related disclosures, IFRS S1 and IFRS S2, has triggered responses from global bodies keen to “promote the timely and wide use of the standards”. In its latest progress report, FSB Roadmap for Addressing Financial Risks from Climate Change 2023, the Financial Stability Board outlined the steps global financial regulators and other bodies will be taking, saying there is “a need to maintain momentum”. The FSB said a key priority is for the International Organisation of Securities Commissions to consider the ISSB standards and endorse them for use by members organisations, including ASIC. It said IOSCO will assist regulators through a “capacity building” program and the ISSB will be publishing adoption guidance. The FSB will co-ordinate the development of a global assurance framework for sustainability-related corporate reporting, to ensure the reliability of disclosures. It is working on standardised metrics for monitoring climate-related vulnerabilities, in conjunction with the World Bank and the International Monetary Fund. And it is working with national regulators to embed climate-related risk into risk management and prudential frameworks. It said the Basel Committee on Banking Supervision is aiming to complete a proposed Pillar 3 disclosure standard for climate-related financial risks by the end of 2023. The Task Force for Climate-related Financial Disclosures will publish a status report on firms’ disclosures in September before handing its work over to the ISSB and disbanding. The FSB said: “Interoperability between the ISSB’s global framework for climate-related disclosures and national and regional jurisdictions’ specific requirements is necessary to achieve global comparability of climate-related disclosures.” The ISSB’s IFRS S1 and IFRS S2 standards are designed to establish a common language for disclosing the effect of climate-related risks and opportunities on a company’s prospects. IFRS S1 requires an entity to disclose information about all sustainability-related risks and opportunities “that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short medium or long term”. It prescribes how an entity prepares and reports its sustainability-related disclosures, with general requirements for content and presentation. Entities will have to provide disclosures about their governance processes, controls and procedures they use to monitor, manage and oversee sustainability-related risks and opportunities. They will have to report on their strategies for managing those risks and opportunities. They will have to disclose the processes they use to identify, assess, prioritise and monitor risks and opportunities and they will have to report on their performance in areas such as progress towards any targets they have set or are required to meet by law or regulation. IFRS S2 is specifically about climate risks. Entities must disclose their exposure to climate-related physical risks and transition risks. Both IFRS S1 and IFRS S2 are effective for annual reporting periods on or after 1 January 2024.