IFRS Foundation highlights the importance of connectivity
During the final plenary session of the 2024 World Standard-setters Conference, the IFRS Foundation’s Connectivity team, led by Yulia Feygina (IASB Technical Director – Connectivity), David Bolderston (ISSB Technical Director), Gabriel Benedict (ISSB Technical Fellow), and Gustavo Olinda (IASB Technical Staff), highlighted the role of connectivity between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards.
This session explored how integrating these two sets of standards helps companies provide high-quality, consistent information to capital markets.
Investors have been vocal about the need for better links between financial and sustainability reporting. This demand is reflected in the IFRS Foundation’s Constitution, which mandates compatibility between the IASB and ISSB standards. This ensures that financial and sustainability disclosures are not only aligned but also enhance each other, giving stakeholders a complete picture of a company’s financial performance and sustainability-related risks and opportunities.
The team walked through real-world examples, demonstrating how climate-related risks and opportunities, such as impairment due to environmental factors or net-zero commitments, can be reported in both financial statements and sustainability disclosures. This complementary approach provides investors with a clearer view of the financial impact of sustainability risks, such as future costs related to emissions regulations, alongside traditional financial metrics like asset impairments.
One of the main takeaways from the session was the importance of consistency. By leveraging shared concepts like materiality and aligning reporting timelines, companies can ensure that financial and sustainability data are fully aligned. This level of connectivity goes beyond meeting regulatory requirements—it’s about fostering trust and transparency with investors.
The session was a strong reminder that, as financial and sustainability risks become more intertwined, so must the way we report them.
Interested in learning more? Watch the full conference video in the following link
