Sustainability and ESG Reporting

Updated: January 10, 2025

Latest article

International Sustainability Standards Board (ISSB): Resources and Guidance

Prepare your entity for upcoming Sustainability Disclosure Standards issued by the ISSB with our suite of guidance and resources.

In June 2023, the ISSB issued its first two IFRS Sustainability Disclosure Standards IFRS S1, General Requirements for Disclosure of Sustainability-Related Financial Information and IFRS S2, Climate-related Disclosures, which are effective for annual reporting periods beginning on or after January 1, 2024. CPA Canada is a proud capacity-building partner in the IFRS Foundation’s Partnership Framework, which is designed to support preparers, investors and other capital market stakeholders as they get ready to use the standards.

The following resources and guidance will help you navigate and prepare your entity for the Sustainability Disclosure Standards issued by the ISSB.

International Sustainability Standards Board (ISSB): Resources and Guidance

ESG

Environment

ENVIRONMENTAL

Read this report to learn more about the Greenhouse Gas (GHG) Protocol, how its standards are currently being used to measure GHG emissions, and observations and implications for standard setters and regulators.

Cities are on the front line of climate change impacts. Learn how climate-related information can support municipal stakeholders with short-term budgeting, long-term capital planning and enhance the usefulness of a city's public financial reports.

From responding to the increasing frequency and severity of extreme weather events, to building resilient infrastructure, cities are incurring higher costs to maintain critical services to their residents, communities and businesses that call them home.

In order to integrate climate change considerations into capital planning and budgeting decisions, decision-makers within municipalities need reliable and consistent climate-related information. While the Task Force on Climate-related Financial Disclosures (TCFD) recommendations were developed for use by the private sector, increasingly cities are recognizing the applicability of these recommendations for their own internal decision-making and external reporting.

This guide highlights some of the actions taken by Canadian cities in response to climate change, demonstrating the climate adaptation leadership underway across the country. It also includes process frameworks for different types of decision-makers within municipalities, including those working in financial reporting and capital planning, to help cities implement the TCFD recommendations.

Climate change is a pervasive risk that continues to impact businesses regardless of their industry and location across the globe. For investment and valuation communities, understanding and assessing these impacts is critical to determining the value of businesses and making sound investment underwriting decisions. The Canadian Chapter of the A4S CFO Leadership Network has developed a five-step framework to help investors and valuators incorporate climate change risks and opportunities into valuations. This framework – complemented with four case studies – offers practical advice on performing a valuation analysis and documenting the assessment. If you would like to learn more about the guidance and Excel-based tool from the valuations project team, please watch the A4S Valuations and Climate Change — Deep Dive Webinar. Note: This webinar is available on the A4S YouTube page (external to CPA Canada).

A review of literature to inform the way forward. Canada's climate is changing, bringing new risks for its roads, buildings, water pipes, ports, and transmission lines.

Can Sustainability be a Driving Force for the Canadian Economy? Current environmental challenges have given rise to new ways of thinking and doing business. Sustainability is having a pivotal influence on business practices to meet the needs of today while securing the needs of tomorrow.

Canada has committed to reach net-zero greenhouse gas emissions by 2050. We reported on the need for a unified national plan earlier this year; this report serves as a transition plan for getting there.

Center for Audit Quality Resource Highlights How Climate-Related Risk Considerations Intersect with the Audited Financial Statements. New publication provides an overview of current accounting and auditing requirements for climate-related risks. Washington, D.C. — Today, the Center for Audit Quality (CAQ) released a new resource, Audited Financial Statements and Climate-Related Risk Considerations, that provides investors and other stakeholders with a foundational understanding of current climate-related reporting and auditing requirements in the U.S. and how they are applied. The CAQ is releasing this report at a pivotal moment for climate-related and other environmental, social and governance (ESG) reporting, as investor and other stakeholder demand for this information continues to increase.

Climate Action and the Accountancy Profession: Building a Sustainable Future: This report considers the role and significance of accountancy and finance professionals in advancing organizational climate action. With surveys and relevant quantitative analyses from across various sectors, the publication seeks to encourage effective planning and measures for climate change. It also emphasizes the integration of finance and sustainability expertise in the areas of business modeling, governance and target-oriented decision making.

Climate change is an urgent, global, and systemic issue that can threaten the sustainability of organizations, markets, and economies. It presents both physical risks (e.g., increasingly severe weather events) and transition risks (e.g., those associated with moving towards a low-carbon economy that may affect asset values or lead to higher costs of doing business). A low-carbon transition will change how economies operate creating both uncertainty and significant opportunities.

A transition to a low-carbon society cannot be achieved by business as usual. Climate action will require relevant policy initiatives and incentives, consistent and well-considered regulation, robust climate risk assessment, responsive business practices, and high-quality disclosures that advance climate action and adaptation. As instrumental members or advisers of every government, business, and not-for-profit organization, professional accountants can influence and enable the transition to low-carbon economies.

Climate-related risks have financial statement impacts. All companies are facing climate-related risks and opportunities and are making strategic decisions in response – including around their transition to a low-carbon economy. These climate-related risks and strategic decisions could impact their financial statements – and KPIs.

Climate change risk-related disclosures in extractive industries reports on a study of 60 of the world’s most carbon-intensive mining, oil and gas companies and the quality of disclosures in their management reports and financial statements about the potential impact of climate change on their business. It concludes that climate change related disclosures need to be improved and that such disclosures in annual reports require more clarity and depth.

This short glossary explains common climate terms and jargon associated with climate.

Climate-related risks have financial statement impacts - All companies are facing climate-related risks and opportunities and are making strategic decisions in response – including around their transition to a low-carbon economy.

These climate-related risks and strategic decisions could impact their financial statements – and KPIs.

Our climate change resource centre provides FAQs to help you identify the potential financial statement impacts for your business. If you sit on an audit committee, you can also use our 10 questions for audit committees (PDF 2.2 MB) as a starting point for your impact assessment.

Climate change may affect financial statements of cities in several different ways. Uncertainties about climate-related risks and events may have implications for a city's cash flows, assets, liabilities, reserves, revenue streams, and cost of capital.

This tool serves to help financial statement preparers and auditors better understand how climate-related issues might affect the application of Canadian public sector generally accepted accounting principles (GAAP). It includes questions to ask under CPA Canada's Public Sector Accounting Handbook when determining the impact of climate-related issues on the financial statements and the associated note disclosures.

You will also find considerations of how climate-related issues may impact reporting outside of the financial statements (i.e. in the annual report) and additional questions to ask under the Public Sector Accounting Board's Statements of Recommended Practice (SORPs).

Climate Scenario Analysis: Current Practice and Disclosure Trends - The impacts of climate change are already being felt around the world. Action must be taken now if we are to avoid its most serious impacts in the future. Although the precise effects of climate change are highly uncertain, they must be integrated into decision-making processes now.

Although not everyone views the COP26 Climate talks as a success, the UN Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP) is a crucial international mechanism for politicians and other key stakeholders to make progress in dealing with climate change. And progress is what happened in Glasgow in November.

Corporate Reporting: Climate Change Information and the 2021 Reporting Cycle

Significant global attention on how business and capital markets are responding to the climate crisis, including increasing regulatory and investor scrutiny, challenges professional accountants—in business and in professional practice—to play an active role in determining the way climate change information is reported in the upcoming 2021 reporting cycle and is enhanced in future years. Although financial reporting standards have not changed, investors and other stakeholders now consider climate change to be a material issue that can have financial consequences for most companies.

CPA Canada and the Canadian chapter of the A4S CFO Leadership Network recently convened a series of virtual events with key players across the energy sector to engage in a dialogue on enabling a net-zero transition for Canada. These events were set up to gather the following insights and viewpoints on a unified national plan toward a net-zero economy: What is the current and desired narrative, and what are the critical gaps to achieving it? This report summarizes what we heard from the different audiences who took part.

DS Smith is a leading supplier of sustainable packaging solutions, paper products and recycling services worldwide. Its story can be traced back to the box-making business started by the Smith Family in East London in the 1940s. Today, it is a large, global company listed on the London Stock Exchange.

True to its Purpose, “Redefining Packaging for a Changing World”, DS Smith is championing the transition to the circular economy with a circular business model that involves collecting used paper that is turned into recycled packaging and then collected to start the loop again.

DS Smith Sustainability Report 2021 provides a progress update on the Now and Next sustainability strategy, which is focused on closing the loop through better design, protecting natural resources by making the most of every fibre, reducing waste and pollution through circular solutions and equipping people to lead the transition to a circular economy.

The costs and effects of carbon are a growing global concern. Large emitters now are faced with the challenge of how to price carbon and account for its impact. Companies participating in the EU ETS already account for 40% of greenhouse gas emissions in Europe, and the European Commission has proposed expanding emissions trading to other sectors, including road transport and shipping. Given the importance of the EU ETS—it has led to a reduction of 35% in emissions—and history, other countries are looking to it to learn from its experiences.

We at IFAC, alongside many of our partners and stakeholders, consistently advocate for relevant, reliable, and comparable sustainability-related information, including enhanced climate risk assessment and disclosure. We believe professional accountants have an essential role to play as companies strive to meet rapidly increasing demands from investors, policy-makers, and other stakeholders for enhanced information addressing the global climate crisis.

EY has reached this target by reducing absolute emissions, and then offsetting or removing more than the remaining amount of EY emissions, every year. EY has reached a major milestone in its four-step carbon ambition and is now carbon negative. The organization continues to focus on reducing absolute emissions in-line with its science-based target and is on-track to reach net zero in 2025. EY teams are using their experience alongside the services, recommendations and people to help others decarbonize and transition to a green future.

 

Addressing climate change is a mammoth undertaking. It requires action from all stakeholders, not just governments. That was why the Kyoto Protocol failed. Governments were committed to various degrees, but most businesses, consumers, and citizens were not. This time they are.

Consider CEOs who are assessing the current landscape as they think about their organizations’ go-forward strategies. They don’t know how the world will unfold, but what they do know is that they must make choices so that regardless of what happens, they are positioned to succeed.

Historically, that success has been focused on investors and regulators and, of course, consumers. Today, however, companies are aware of larger sustainability forces at play. At the macro level, governments and regulators are debating action and public opinion is evolving. But only when these issues affect companies at the micro, organizational level, will sustainability be more than just another issue on the horizon, and that moment is happening now.

Gain a competitive advantage and lower your carbon footprint? Find out how to apply a step-by-step process to reduce GHG emissions for your organization. This guideline provides a straightforward and step-by-step process to identify, implement, measure, monitor, and report on GHG emissions.

LEARN HOW TO: adopt a low carbon emissions mindset; establish appropriate GHG emissions management systems and tools; implement actions to manage and report on GHG emissions and accelerate efforts to achieve efficiencies and cost savings.

YOU WILL ALSO FIND: discussion on emerging industry trends, challenges, and opportunities; insights into how CPAs play an important role in establishing effective GHG emissions management systems and additional resources on climate change adaptation and mitigation.



The organization is calling on regulators around the world to consider adopting the standards.
Global securities regulators are formally embracing the International Sustainability Standards Board’s (ISSB) climate-disclosure standards, clearing the way for adoption around the world.

Following a comprehensive review, the International Organization of Securities Commissions (IOSCO) has endorsed the ISSB’s final standards for sustainability disclosures, which were published in June following an 18-month consultation process.

At its meeting on 4 April 2023, the International Sustainability Standards Board (ISSB) decided that it will complement its package of transitional reliefs to support companies applying the ISSB’s first two Standards—S1 (general requirements) and S2 (climate).

The relief will enable companies to focus initial efforts on ensuring they meet investor information needs around climate change.

It means companies can prioritise putting in place reporting practices and structures to provide high-quality, decision-useful information about climate-related risks and opportunities in the first year of reporting using the ISSB Standards.

Investor Interviews on Climate Disclosure and Decision-Making - Key Findings

Investors recognize that a transition to a low-carbon economy is happening, bringing significant investment opportunities and risks. Are you prepared to respond with the information they need?


Revisiting the Megatrends
Almost a decade has passed since the PwC network identified five Megatrends, which we characterised as deep and profound trends, global in scope and long-term in effect, touching everyone on the planet and shaping our world for many years to come. It is now clear that these Megatrends have transformed our world even faster than we predicted. Largely this is due to the interaction between the trends, which has turbocharged both the speed and pervasiveness of change.

A PDF version of this publication is attached here: Navigating the ESG landscape (PDF 314kb)

After years of increasingly vocal demand for enhanced transparency about ESG matters from investors and other stakeholders, regulators and standard setters in various jurisdictions issued definitive proposals to transform ESG reporting in 2022. So far this year, proposed ESG disclosures have been released in the European Union (EU) as part of the Corporate Sustainability Reporting Directive (CSRD), internationally by the International Sustainability Standards Board (ISSB), and in the US by the SEC. These “big three” proposals would each require expansive sustainability disclosures — although their proposed scopes and other details vary. All three proposals were subject to public comment periods that have now closed.
With a global network of reporting requirements that encompass a broad spectrum of value chain contributors, it is likely that most companies will find themselves impacted by one or more of the proposed disclosure regimes. Proactive companies are in the process of assessing the scope and applicability of the proposals so that the appropriate planning can begin now. An SEC registrant that has a subsidiary listed in the EU and a subsidiary in a jurisdiction that requires ISSB reporting, for example, may be subject to the requirements in all three proposals. With equivalency — that is, whether disclosures for one reporting framework can satisfy some or all of the requirements of another — not yet determined, companies captured in multiple reporting regimes have a vested interest in understanding which reporting applies and where it aligns and diverges. Understanding the similarities and differences will help companies develop the requisite reporting strategy, data gathering processes, and related controls, providing for a streamlined process and effective deployment of resources.
This publication compares and contrasts key provisions among the three proposals. We offer our perspectives on the proposals, including some of the suggestions we have made to each regulator or standard setter to enhance operability. By understanding the requirements of the different proposals, preparers can develop the appropriate reporting strategy, one designed to capture the right data the first time.

GUIDANCE PRODUCED BY A4S

Achieving net zero emissions in an organization will rely on the knowledge, skills and processes inherent within the finance function. Where an organization has made a net zero commitment, finance professionals are well placed to develop pathways to achieve net zero, setting interim targets, allocating funds, reporting progress and integrating net zero into decision making processes over time.

On June 20, 2024, new provisions were added to the Competition Act that explicitly target greenwashing. Simply stated, businesses are now required to have testing or substantiation to support certain environmental claims.

This report outlines the key findings from a CPA Canada and Deloitte study of climate-action plans of 20 Canadian public companies and how they communicate them.

CPA Canada's VP of Member Experience Rosemary McGuire will sit down with Scott Bandura, Partner of National & Global Accounting Consulting Services at PWC and Conor Chell, Partner & National Leader, ESG Legal Risk & Disclosure at KPMG to discuss the ramifications of the new greenwashing regulations that resulted in amendments to the Competition Act in June 2024.

Sustainable-bond issuance surged to a record high in the first quarter as more countries and companies looked to tap growing demand from investors across the globe. Environmental concerns have risen for many investors in recent years as the world steps up its transition to a low-carbon economy, while the COVID-19 pandemic has put a renewed focus on health and broader social inequality.

Putting the E in ESG is the first of a three-part series of briefs exploring sustainability, business and the finance professional’s key role. This introduction to the series highlights environmental protection factors that finance professionals can focus on to make a difference. It includes a call to action for finance professionals to help organizations improve their impact on the planet.

As highlighted in the Sustainability and business — the call to action; build back better report, we started a programme of thought leadership to explore accountancy and sustainability. This is part of a series of briefs exploring the topic of sustainability, business and the finance professional’s key role. These briefs will help organizations consider the sustainability issues, how to integrate them into their long-term decision-making, and how to incorporate these issues into internal and external reporting.

Taskforce on Climate-related Financial Disclosures (TCFD): ahead of mandatory reporting (Financial Reporting Council’s Financial Reporting Lab) - Financial markets need clear, comprehensive, high-quality information on the impacts of climate change. This includes the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in our changing world.

Scenario analysis, a key recommendation of the TCFD, allows a company to understand and quantify the risks and uncertainties it may face under different hypothetical futures. It helps in decision making and allows businesses to shape their strategy. In the light of scenario analysis outcomes, businesses can focus on those key risks and opportunities that most materially impact their business models. This, in turn, allows them to develop their mitigation plans and respond appropriately to these risks through strategic decisions.

A group of major global accounting industry organizations, representing millions of accountants around the world, announced a series of climate-focused initiatives, including commitments to achieve net zero greenhouse gas (GHG) emissions within their own organizations and to help enable members to set and follow their own net zero strategies.

The organizations are part of the Accounting Bodies Network (ABN), a collaboration between the sustainable business-focused Accounting for Sustainability (A4S) and professional bodies across the globe. The 13 signatories to the new climate initiative include accounting bodies from Canada, Japan, Australia, and Europe, among others, and the globally-focused Association of Chartered Certified Accountants.

There are growing expectations for companies to contribute to the fight against climate change by reducing greenhouse gas emissions from their operations and value chains. However, in order to set targets and develop effective plans to cut emissions, we need to properly account for the level of emissions and where they are coming from. How this data is to be collected and reported is often little understood.

This three-part series takes a deep dive into voluntary carbon markets and their challenges, providing insight into the world of carbon offsets for accountants, investors, regulators and policymakers.

The implementation of border carbon adjustments will offer CPAs a key opportunity to provide guidance around new policies and regulations while driving their organizations and clients toward lower carbon business models.

Canada’s transition to net zero by 2050, which was enshrined in legislation in 2021, requires significant reductions of greenhouse gas (GHG) emissions. To achieve that objective, GHG emissions need to be included in our everyday business and consumption decisions. This is done by putting a price on emissions, expressed in carbon units, which has been implemented across Canada. The federal government intends to increase the price annually in the coming years.

As the popularity of environmental credits grows, so do concerns regarding their financial reporting. This Accounting Spotlight examines environmental credits and key carbon accounting considerations.

Background:
An increasing number of entities in different sectors and industries aim to reduce global greenhouse-gas emissions. While several are taking steps to reduce their own carbon emissions, these efforts may not be sufficient to achieve required or voluntary emission commitments.

Environmental credits can help entities accomplish their carbon emission reduction targets and goals. The popularity of such credits has grown; however, questions have emerged regarding the accounting and reporting for them since the treatment of environmental credits is not explicitly addressed in US GAAP.

With the focus on climate issues and potential policy approaches, businesses need to know their carbon footprint and how they may be affected. Company environmental, social and governance policy and reporting has become increasingly important. Climate change and climate risk have taken center stage, and companies need to understand their carbon footprint to properly disclose risks and opportunities. Close examination of both direct and indirect carbon emissions in a company’s supply chain can help them measure and understand their carbon footprint.

SOCIAL

The pandemic and cultural and socio-economic reckonings that followed have ushered in a new era for the ‘S’ in ESG. In the wake of rapidly evolving social expectations, and in the context of an unprecedented battle for talent, management teams have strived to build more inclusive and human-centric work environments. Most organizations are adapting to the post-pandemic world by offering employees flexibility, increasing their commitments to employee health and safety, and educating their teams about diversity, equity, and inclusion (DEI) and Indigenous reconciliation. Indeed, as these practices become more widely adopted, they may be regarded as new norms that contribute to an organization’s social license to operate.

There remains much work to be done for businesses to manage their exposure to social risks and opportunities, particularly those related to complex and evolving social issues including DEI, Indigenous reconciliation, and human rights.

IFAC defined two key actions for G20 leaders to focus on as COVID-19 persists: supporting the IFRS Foundation’s initiative on sustainability standards, and championing public financial management. Commitment to these two actions, which build on the four priorities laid out in IFAC’s 2020 G20 Call to Action, is central to building a better future.

CPA Gord Beal, CPA Canada’s vice-president, research, guidance and support on why accountants must recognize and embrace their critical role in the process. Believe it or not, corporations weren’t always driven by profit.

Dating back to the 17th century, the earliest corporations were established to help support the greater society, whether it was to build hospitals or effectively develop a product; the corporation offered a formal, organized structure meant to protect liabilities and the management of the business itself. It’s not that they weren’t making money, but that was not strictly the focus.

Throughout time, an enterprise’s purpose has been associated with creating value for its shareholders. In today’s day and age, however, shareholders should be replaced by stakeholders in such definition. Actions and decisions of an enterprise have an impact in a wider population, defined as stakeholders. In our present world, a company or firm has responsibilities that extend beyond its profit-generating capabilities and into the effect it has in its environment and society. In the acknowledging and complying with this commitment, a firm is able to engage in corporate social responsibility (CSR), making it socially accountable — to itself, its stakeholders, and the general public.

There has been a growing focus on the “social” pillar of environmental, social and governance (ESG) matters. This report examines why these social factors are increasingly important and how CPAs can lead in this space.


The Rise of the Social Pillar: An Introduction to the ‘S’ in ESG is a foundational resource for CPAs that explores the diverse range of social factors impacting organizations and the complexities as organizations are expected to increase transparency and accountability for their social impacts, practices and performance.


GROWING DEMAND FOR ACTION AND TRANSPARENCY ON SOCIAL FACTORS

Stakeholders increasingly expect organizations to consider the impact of social matters on their business models, operations and across their value chains. Additionally, regulators and governments across the globe are looking at integrating social matters into policymaking and disclosure rules. The scope of social matters is broad and includes:


THE ROLE FOR CPAS

CPAs have a critical role to play in facilitating the integration of social factors into an organization’s strategy, in its risk and performance management, and into the reporting and assurance of relevant information.

WSIB recognized the value of their employees by investing in an internal mental health strategy. Learn from their journey and experiences.

As social issues draw more investor and consumer attention, businesses are starting to strengthen their efforts in this area.
While there has been a lot of talk lately about environmental, social and governance (ESG) investing and reporting, the focus so far has been mainly on the “E.” 

GOVERNANCE

20 questions directors of not-for-profit (NFP) organizations should ask about a director’s duties

Directors of NFP organizations have various duties to their organizations and to themselves in terms of personal liability. Learn what the duties of loyalty and care encompass, and how to successfully fulfil them.

IFAC Comment: A strong governance structure is one of the key elements necessary for the successful growth of any organization. IFAC considers effective and transparent governance fundamental for building trust and for achieving its strategic objectives. Many of our member organizations have led the way on strong governance practices and diversity initiatives, but there are often opportunities for making further enhancements and for empowering others. It is important to periodically review and consider best practices, adopting those that would be most effective for your organization based on its values, mission, purpose, and strategy.

The cornerstone of strong governance is strong leadership, starting with the Board of Directors. The role of a Board is to provide strategic guidance and oversight of operations. This ensures an organization makes an unyielding commitment to integrity and takes purposeful steps to achieve its mission. Given the Board’s key role, it is critical for the Board to collectively represent the best mix of expertise and experience.

In this Q&A article, we explore the important qualities any Board member should have and the key components of an effective Board. Joan Amble shares insights from her extensive experience on corporate Boards to help us reflect on our own governance structure, positioning our organizations for success, and being prepared for challenges. Joan offers her personal views, which are not attributed to any particular organization.

This article provides insights into how companies can establish effective governance over their environmental, social and governance reporting to ensure high-quality disclosures. Topics discussed include: how to determine the materiality of ESG topics; how to implement board oversight over material ESG matters; and how to integrate ESG matters into the overall company strategy.

Investors have increasingly been asking for companies to report on their sustainability efforts. What role do boards play in this disclosure?

STANDARD SETTING

For businesses around the world, there has never been a greater focus on sustainability. Over recent years the degree to which sustainability is integrated into investment decision making and interactions between companies and their investors has increased significantly. There is, however, more to do to make engagement as effective as possible.

This is a practical guide written by investor relations (IR) teams for investor relations teams, with contributions from CFOs, IR Directors and investors. The guidance has been developed based on the practical experience of CFOs and IR teams from across the A4S CFO Leadership Network, insights from investors and other experts.

Read more: A4S Essential Guide Series: Enhancing Investor Engagement

The trustees of the International Financial Reporting Standards (IFRS) Foundation, the governing board of the International Accounting Standards Board (IASB) that develops IFRS, issued a consultation paper in September 2020 proposing to get into the sustainability reporting game.

That was followed by an April 2021 exposure draft that included the creation of the International Sustainability Standards Board (ISSB), which would set IFRS sustainability accounting standards under the IFRS Foundation’s governance structure.

The initial September 2020 paper received a whopping 577 responses from around the world, most of which pointed to the conclusion that, as noted in April 2021, “there was indeed an urgent need for global sustainability reporting standards. Moreover, there was broad agreement among the respondents to the Consultation Paper that the Foundation should play a leading role in the development of such standards.”

Read more: A Baseline for Sustainability Standards

The IFRS Foundation trustees issued a consultation relating to the governance and composition of a proposed International Sustainability Standards Board (ISSB). If established, the new board will develop a set of global standards for reporting on environmental, social and governance matters.

CPA Canada supports the IFRS Foundation’s proposal to create a new ISSB under its governance structure and we commend the IFRS Foundation for moving quickly on the establishment of an ISSB while ensuring it is set up to operate in an effective manner.

Read more: CPA Canada comment letter on proposed changes to IFRS Foundation constitution

 

Chartered Professional Accountants of Canada (CPA Canada) is encouraging leaders from the country’s private and public sectors to weigh in on important steps toward establishing a new international sustainability standards board.

The IFRS Foundation Trustees have launched a consultation relating to the governance and composition of a proposed International Sustainability Standards Board (ISSB). If established, the ISSB will develop a set of global standards for reporting on environmental, social and governance (ESG) matters.

Currently, there are multiple reporting frameworks related to sustainability and variability in reporting approaches. The business landscape has evolved to the point where a global common solution is needed. An ISSB will reduce complexity and establish a common playing field with high-quality global standards for ESG reporting. Importantly, this initiative has been strongly supported by international securities regulators.

Read more: CPA Canada urges united effort domestically to support international sustainability standards board

Comments on the International Sustainability Standards Board (ISSB) Exposure Drafts

Read the full letter: Comments on the International Sustainability Standards Board (ISSB) Exposure Drafts.PDF

The practice of publicly disclosing transition plans is rapidly evolving, and yet significantly fewer companies have disclosed comprehensive plans than have committed to reach net-zero or pledged to reach climate neutrality. There’s no quick fix towards achieving climate commitments, but companies need to understand and communicate their climate-related risks and opportunities and how they plan to meet their climate commitments.

In this Climate Week NYC event co-hosted by IFAC and A4S, we'll hear from finance leaders at various steps of their transition journeys and explore their perspectives on:

  • Enabling an organization’s transition planning
  • Overcoming key challenges including financing and data
  • Where CFOs have the most to add in terms of achieving climate targets and developing and executing transition plans
  • CFO expectations of reporting standards and requirements that would facilitate company disclosure

Moderated by Brad Sparks, Executive Director, A4S, the panel discussion features:

  • Shamsul Bahar, VP & Group Financial Controller, PETRONAS
  • Patti Humble, IMA Board Member, and Chief Accounting Officer, UPS
  • Kee Chan Sin, Assistant Treasurer - Capital Markets & Corporate Finance, Verizon
  • Swami Venkataraman, Associate Managing Director, ESG, Moody’s
  • Jing Zhang, Head of Climate Research, IFRS Foundation

Watch on YouTube:  Finance Leaders Plugging the Net-Zero Information Gap

The ISSB set a clear path for the SASB Standards when it launched draft IFRS Sustainability Disclosure Standards, explaining how initially the industry-based SASB Standards can help companies identify their sustainability risks and opportunities along with metrics to use in their disclosures. The SASB Standards provide disclosures across a range of sustainability matters and, over time, will inform the industry-based requirements in the IFRS Sustainability Disclosure Standards. As such, report preparers will benefit from starting now, using the SASB Standards to meet the immediate needs of investors while laying the groundwork for adoption of IFRS Sustainability Disclosure Standards in the coming years.

Here are a variety of recent ISSB decisions to be aware of as you plan for 2023, followed by some tips for how best to prepare for the future application of IFRS Sustainability Disclosure Standards.

Read more: Future of the SASB Standards: What you need to know for 2023 disclosure

The Global Reporting Initiative (GRI) recently published its revised Universal Standards, which go into effect on January 1, 2023. The revision will require all companies reporting in accordance with GRI standards to report on human rights impacts and due diligence obligations. Some companies are already required to report on such human rights impacts under modern slavery legislation like the U.K. Modern Slavery Act or Australia Modern Slavery Act. Under the revised standards, any company reporting in accordance with GRI standards will need to report on human rights impacts regardless of whether they are subject to other human rights reporting regimes.

Read more: GRI Updates to Universal Standards Emphasize Human Rights Reporting

IFRS Foundation podcasts

To help stakeholders stay up to date and engage with the work of the International Accounting Standards Board, the International Sustainability Standard Board and the IFRS Interpretations Committee, the IFRS Foundation produces podcasts where we summarise and discuss the latest developments, meetings and project developments.

If you would like to be alerted by email whenever we produce a new podcast, you can do so by choosing the relevant follows in the dashboard. Most podcasts are about our projects, so follow 'Standards Development'. If you choose to follow specific Standards you will be alerted to podcasts relevant to those Standards. You will need to be a registered user of the website to do so.

Learn more: IFRS Foundation podcasts

The Trustees of the IFRS Foundation (Foundation) today published proposed amendments to the Constitution of the Foundation to accommodate the potential formation of a new International Sustainability Standards Board (ISSB) within the governance structure of the organization. In addition, the Trustees have published a Feedback Statement that summaries feedback received to their consultation on sustainability reporting.

Read more: Proposed Targeted Amendments to the IFRS Foundation Constitution to Accommodate an International Sustainability Standards Board to Set IFRS Sustainability Standards

The International Sustainability Standards Board (ISSB) has published the Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft) which sets out the overall requirements for an entity to disclose sustainability-related financial information about all its significant sustainability-related risks and opportunities, to provide the market with a complete set of sustainability-related financial disclosures.

Read more: Exposure Draft and comment letters: General Sustainability-related Disclosures

Global capital markets demand better information about sustainability-related matters to enable investors to factor in sustainability-related risks and opportunities in their assessment of enterprise value.

The ISSB has been created to meet this demand. The ISSB has now published its first two proposed IFRS Sustainability Disclosure Standards which—once finalised—will form a comprehensive global
baseline of sustainability disclosures designed to meet the information needs of investors when assessing enterprise value.

The proposed IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft) would require companies to disclose information about all of their significant sustainability-related risks and opportunities. The proposed IFRS S2 Climate-related Disclosures (Climate Exposure Draft) focuses on climate-related risks and opportunities. It incorporates the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and includes metrics tailored to industry classifications derived from the industry-based SASB Standards.

Read more: Exposure Draft—Snapshot: IFRS® Sustainability Disclosure Standards.PDF

Prepare your entity for upcoming Sustainability Disclosure Standards issued by the ISSB with our suite of guidance and resources.

In June 2023, the ISSB issued its first two IFRS Sustainability Disclosure Standards IFRS S1, General Requirements for Disclosure of Sustainability-Related Financial Information and IFRS S2, Climate-related Disclosures, which are effective for annual reporting periods beginning on or after January 1, 2024. CPA Canada is a proud capacity-building partner in the IFRS Foundation’s Partnership Framework, which is designed to support preparers, investors and other capital market stakeholders as they get ready to use the standards.

The following resources and guidance will help you navigate and prepare your entity for the Sustainability Disclosure Standards issued by the ISSB.

Read more: International Sustainability Standards Board (ISSB): Resources and guidance

September 15, 2022 - IOSCO encourages standard setters’ work on assurance of sustainability related corporate reporting.

IOSCO welcomes the work of the international audit and assurance standard setters – the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) – on assurance of sustainability-related corporate reporting. There is a growing trend of stakeholders seeking assurance of sustainability-related information, whether on a voluntary basis or to meet regulatory requirements. The IAASB and the IESBA work is an important response to the accompanying market demand for robust standards applicable to all providers of sustainability assurance that can be used to foster independent, high-quality engagements and consistent practices.

Read the full IOSCO statement: IOSCO encourages standard setters’ work on assurance of sustainability related corporate reporting.PDF

The Corporate Reporting Webinar Series offers a deep dive into the International Sustainability Standards Board's (ISSB) two proposed standards, one on general requirements for sustainability-related disclosures and one on climate-related disclosures. We discuss how companies can start the groundwork, data gathering and processes for ISSB reporting by using tools already widely available for businesses and investors.

The series consists of three parts:

  • Part 1: Better information for better decisions—Introduction to investor-focused sustainability disclosure
  • Part 2: Any size or stage—Getting started on climate disclosure
  • Part 3: Connectivity and controls—the path to investor-grade disclosure

Learn more: ISSB Corporate Reporting Webinar Series


What is the IFRS Foundation and how does it serve the public interest? The IFRS Foundation is a not-for-profit organization created in 2001. It serves the public interest by developing globally accepted reporting standards that meet investors and other capital market participants’ need for transparent and comparable information to make economic decisions.

Learn more: ISSB: Frequently Asked Questions


Clear, comprehensive and comparable disclosure of sustainability-related information is one of the foundational building blocks of a well-functioning global financial system. Financial market regulators should seize this historical and fast-closing window of opportunity to get it right by ensuring compatible standards.

Significant efforts by the International Sustainability Standards Board (ISSB), the US Securities and Exchange Commission (SEC), and the European Commission together with the European Financial Reporting Advisory Group (EFRAG), all aim to address the need to enhance and evolve corporate reporting to include and consider sustainability.

Learn more: Leading Financial Market Participants Call for Stronger Alignment of Regulatory & Standard Setting Efforts around Sustainability Disclosure

An in-depth look at the first exposure drafts issued by the International Sustainability Standards Board. New proposals on the first IFRS® Sustainability Disclosure Standards mark the next step toward equal prominence for international sustainability and financial reporting. The proposals aim to create a global baseline for investor-focused sustainability reporting that local jurisdictions can build on.

Read more: Proposed IFRS Sustainability Disclosure Standards

As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB has committed to build on the industry-based SASB Standards and leverage SASB’s industry-based approach to standards development. The ISSB encourages preparers and investors to continue to provide full support for and to use the SASB Standards until IFRS Sustainability Disclosure Standards replace SASB Standards.

SASB Standards identify the subset of environmental, social, and governance issues most relevant to financial performance in each of 77 industries. They are designed to help companies disclose financially-material sustainability information to investors.

Click the link below to download any of the 77 industry-based SASB® Standards.

Learn more: SASB Standards for 77 industries and the SASB Standards Application Guidance

On 17 February, more than 1,000 people from 45 countries convened in Montreal and online to discuss what’s next for investor-focused sustainability disclosure. Onsite in Montreal, the room was abuzz as businesses, investors, policymakers, regulators and other stakeholders engaged in meaningful discussion about the forthcoming standards from the International Sustainability Standards Board (ISSB). Read on for seven key takeaways from the day’s sessions.

Read more: Seven key takeaways from the IFRS Sustainability Symposium


With companies of all kinds being asked to provide sustainability information, CPAs need to prepare for reporting and assurance engagements in this area.

Sustainability reporting has been gaining momentum across a growing number of industries. And, as stakeholders and investors look for more information on a company’s ESG policies and footprint, the demand for third-party assurance of that information is also increasing.

Read more: Sustainability: ‘We absolutely must wrap our minds around this’

Sustainability Frameworks & Standards: Sustainability Accounting Standards Board presents a summary of the Sustainability Accounting Standards Board’s industry-specific standards for identifying financially material sustainability issues. Written from a management accounting perspective, the report is the first of a series of briefs exploring sustainability, business and the finance professional’s key role. These briefs will aim to help organizations consider their sustainability issues and how to integrate them into their long-term decision making, as well as their internal and external reporting.

Read more: Sustainability Frameworks & Standards

Demand for timely, accurate, and relevant sustainability information has risen dramatically in recent years. For sustainability reporting to meet the needs of stakeholders in the public interest, the infrastructure that supports sustainability reporting and assurance must be underpinned by high standards of ethical behavior and independence together with a robust system of quality management, oversight and enforcement.

Read more: Sustainability Reporting and Assurance: A Focus on Ethics and Independence


The goal of achieving global adoption of integrated reporting across all industry sectors is continuing to gain momentum, according to an in-depth study of adoption trends conducted by IFRS Foundation staff.

Integrated reporting enhances the way organisations think about, plan and report on business performance and provides insights into their future prospects through a multi-capital and value creation lens. More than 2,500 businesses in 70+ countries have adopted integrated reporting. The IASB and ISSB Chairs encourage the continued use of the Integrated Reporting Framework—now part of the IFRS Foundation—and commit to using its principles and concepts to help achieve a globally-accepted, comprehensive corporate reporting system.

Read more: The growing momentum for integrated reporting: Part 1

Next Steps for the Accountancy Profession - With the establishment of the International Sustainability Standards Board, the way forward is clear: The accountancy profession must lead on climate reporting and other material environmental, social and governance disclosures and their assurance—contributing to strong and sustainable financial markets and economies and enabling the UN’s Sustainable Development Goals.

Read more: Time for Action on Sustainability: Next Steps for the Accountancy Profession

External assurance plays a key role in enhancing trust and confidence in financial and non-financial reporting.

The International Organization of Securities Commissions (IOSCO), the international body of securities regulators, has issued a statement of support for ISSA 5000, highlighting how it fulfills key IOSCO recommendations to establish a comprehensive global assurance framework for sustainability-related corporate reporting.

Read more: Understanding International Standard on Sustainability Assurance 5000

 

The International Sustainability Standards Board (ISSB) held two live webinars on 28 April for all stakeholders on its proposed standards on general sustainability-related disclosures and climate-related disclosures. The consultation period ends on 29 July 2022, with the aim to finalise the requirements by the end of the year, subject to feedback.

Watch webinar: Webinar on the ISSB’s exposure drafts


Chartered Professional Accountants (CPAs) will play a critical role in helping businesses navigate reporting under new sustainability disclosure standards.

Stakeholder and investor demands for greater insight into sustainability performance are pushing businesses to report on metrics beyond the bottom line — creating a pressing need for a system to hold them accountable.

“Changing societal demands for greater disclosures on sustainability issues are becoming a mainstay in corporate reporting,” says Pamela Steer, president and CEO of CPA Canada. “It’s no longer just about the bottom line. There’s an expectation for organizations to take accountability for their impact on society and the environment.”

Read more: Why CPAs are integral to sustainability reporting

APPLICATION and GUIDANCE

The IAASB Quarterly Board Meeting - March 22, 2023 - Session 3

Watch on YouTube: IAASB Quarterly Board Meeting - March 22, 2023 - Session 3

Preparers' guide to the IFRS Sustainability Disclosure Standards.These resources are designed to help integrated report preparers apply the ISSB Standards from next year.

Read more: IFRS Knowledge Hub

The Corporate Reporting Webinar Series offers a deep dive into the International Sustainability Standards Board's (ISSB) two proposed standards, one on general requirements for sustainability-related disclosures and one on climate-related disclosures. We'll discuss how companies can start the groundwork, data gathering and processes for ISSB reporting by using tools already widely available for businesses and investors.

Read more: ISSB Corporate Reporting Webinar Series


This report examines the importance of readily available, relevant, and reliable sustainability information for achieving better-informed decisions, enhanced strategic and risk management, and more thorough and valuable reporting to external stakeholders. It also highlights a range of emerging services that practitioners can provide to their clients, including advisory services, reporting, agreed-upon procedures (AUP) engagements, and assurance services.

Read more: Sustainability Information for Small Businesses: The Opportunity for Practitioners

CPA Canada’s series of Sustainability Reporting Alerts (the Alerts) introduce concepts within sustainability disclosure and assurance standards. The Alerts are meant for preparers and auditors of sustainability information, typically CPAs or other sustainability professionals. The International Sustainability Standards Board (ISSB) issued the first two International Financial Reporting
Standards (IFRS) Sustainability Disclosure Standards (the Standards) in June 2023. IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2) are effective for annual reporting periods beginning on or after January 1, 2024. Transitional relief in IFRS S1 allows an entity to disclose information on only climate-related risks and opportunities (as set out in IFRS S2) in the first year it applies IFRS S1 and IFRS S2. IFRS S1 and IFRS S2 disclosures are meant to be complementary to both IFRS accounting standards and other generally accepted accounting principles and will form part of an entity’s general purpose financial reports.

Read more: Sustainability Reporting Alert - Climate-related scenarios analysis.PDF

CPA Canada’s series of Sustainability Reporting Alerts (the Alerts) introduce concepts within sustainability disclosure and assurance standards. The Alerts are meant for preparers and auditors of sustainability disclosures, typically CPAs or other sustainability professionals. Sustainability disclosures are not yet required in Canada; however, the newly formed Canadian Sustainability
Standards Board (CSSB) is working with the International Sustainability Standards Board (ISSB) to support the adoption of International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards (the Standards) in Canada. Until the Standards are required, they may be applied voluntarily. IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2) were issued in June 2023 effective for annual reporting periods beginning on or after January 1, 2024. Transitional relief in IFRS S1 allows an entity to disclose information on only climate-related risks and opportunities (as set out in IFRS S2) in the first year it applies IFRS S1 and IFRS S2. IFRS S1 and IFRS S2 disclosures are meant to be complementary to both IFRS Accounting Standards and other Generally Accepted Accounting Principles and will form part of an entity’s general purpose financial reporting.

Read more: Sustainability Reporting Alert - Scope 1 & 2 GHG Emissions.PDF

In June 2023, the ISSB issued its first two IFRS Sustainability Disclosure Standards IFRS S1, General Requirements for Disclosure of Sustainability-Related Financial Information and IFRS S2, Climate-related Disclosures, which are effective for annual reporting periods beginning on or after January 1, 2024. CPA Canada is a proud capacity-building partner in the IFRS Foundation’s Partnership Framework, which is designed to support preparers, investors and other capital market stakeholders as they get ready to use the standards.

The following resources and guidance will help you navigate and prepare your entity for the Sustainability Disclosure Standards issued by the ISSB.

Read more: International Sustainability Standards Board (ISSB): Resources and guidance

Capital markets have emerged as one of the fastest growing and innovative market segments for ESG, fueled by ambitious sustainable finance commitments from leading banks and corporate issuers. With a growing number of instruments in the sustainable finance toolkit, cumulative issuance of sustainable debt has surpassed $3 trillion USD.

Read more: Sustainable Debt Instruments: What are the Benefits and Drawbacks?

Tune into this two-part webinar to learn about the rapidly evolving sustainability landscape. Hear about recent developments in sustainability reporting and assurance standards and regulatory requirements, and the implications and opportunities for CPAs.

Read more: Webinars: Sustainability Reporting and Assurance – What You Need to Know (September 2023)

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