A New Era of ESG Reporting: What Miners Need to Know About the ISSB Standards

We’re entering a new era of sustainability disclosure. June saw the much-anticipated launch of the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards by the International Sustainability Standards Board (ISSB). The standards mark a significant global shift in financially-relevant sustainability disclosure. Strong investor and regulator support, as well as G7 and G20 endorsement, suggest they will rapidly become expected and indeed even mandatory in many jurisdictions, including Canada and the United States, as soon as 2025.

Capital intensive industries like mining are likely to quickly adopt these investor-focused standards, but in doing so, may risk forgoing other strategic insights on sustainability risk and opportunity and miss chances for meaningful engagement. We cover what your company can expect and what questions to ask to ensure your materiality and disclosure efforts add value to your business.

Scope of the ISSB Standards

In the works since COP26 in November 2021, the inaugural standards — IFRS S1 and IFRS S2 — seek to provide a common language and single global baseline for investor-focused sustainability reporting to bridge the information gap between companies and investors. Individual jurisdictions can build on the standards to suit their requirements. The standards come into effect at the start of 2024. They will help companies to communicate their sustainability risks and opportunities in a robust, streamlined, comparable, and verifiable manner, providing high-quality decision-useful data to support stronger corporate strategy and more informed investor decision making.

The standards are designed to be applied together and will be part of a broader suite of sustainability standards. IFRS S1 is the general standard, providing a framework for companies to report on the financially-relevant sustainability risks and opportunities they face in the short, medium, and long term, as well as governance, strategy, risk management, and metrics and targets. This is supplemented by IFRS S2, which focuses on climate-related risks and opportunities. While future standards on additional material topics are expected, companies are advised to use the general standard guidance to report on them in the interim. ISSB has also offered companies relief from reporting on Scope 3 GHG emissions during the first year.

Alignment with existing standards

The ISSB standards are designed to complement and consolidate existing disclosure standards, amalgamating and building on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, Sustainability Accounting Standards Board (SASB) Standards, Climate Disclosure Standards Board (CDSB) Framework, Integrated Reporting Framework, and metrics from the World Economic Forum. The effort is likely to reduce the complexity, cost, and effort of reporting for companies operating in multiple jurisdictions or struggling to juggle multiple stand-alone frameworks.

The SASB Mining standards and TCFD in particular, have seen rapid uptake across the industry in recent years. Companies already reporting under these will have a head start in aligning with the new global baseline. If your company does not use SASB, you may wish to familiarize yourself with the Metals & Mining or Coal Operations standards and assess your readiness to align disclosure.

The ISSB aims to complement and be compatible with the longstanding Global Reporting Initiative (GRI) sustainability reporting standards, which meet the information needs of a broad range of stakeholders beyond capital markets. Ongoing close collaboration with jurisdictional standard setters, including the Canadian Sustainability Standards Board (CSSB), should also ensure harmonization and interoperability with incoming mandatory reporting requirements, eventually reducing the reporting burden for companies.

Learn more: Mining.com