The IFRS Foundation (for its English acronym), started in 2021, leads the project of creating global standards, hand in hand with GRI, TCFD (for its acronym in English) and the VRF (for its English acronym), in response to the request by companies, investors and consumers around the world to simplify and unify the standards of financial information, sustainability and to integrate information on climate issues. 

On February 17th, 2023, the International Sustainability Standards Board - ISSB - approved the project’s content on the new global standards. The next step is the final drafting and then the vote. 

The disclosure of the new ISSB standards is scheduled for June 2023, organised into: IFRS S1 (General Requirements for the Financial Information on Sustainability disclosure) and IFRS S2 (Climate-related Disclosures). 

For the first time, the integration of a non-financial information with a financial information will be required. In addition, the reference to European standards (ESRS, for its acronym in English) is also integrated into the S1. 

To facilitate the market flow, S1 and S2 build on existing frameworks and standards, the ESG (Environmental, Social, and Governance) and Sustainability SASB, created in 2011, and the TCFD reporting framework. This means that companies that have already adopted these recommendations will have the task simplified. 

The project for the new standards is designed to have a global application, at a territorial level and customised to the company size, since its application is also planned for small companies. 

Therefore, what are the implications of these new standards for companies? The need to develop and implement sustainability plans and integrated reporting strategies in the coming months, as IFRS S1 and S2 become effective in January 2024, considering the content of Annex 2 of Circular 031 of the Colombian Financial Superintendence.

The next IFRS event will take place in London on the 26th and 27th of June.