Investors and other stakeholders increasingly demand information on companies' management of climate risks and impacts; hence this decision marks a significant milestone for developing climate and sustainability-related reporting standards. The disclosure across all three scopes is essential for investors to gain a complete understanding of climate-related risks and opportunities. Consequently, the methodologies for disclosing Scope 3 emissions will improve rapidly.
Additionally, the ISSB will decide on relief provisions in a future meeting in order to support companies in complying with Scope 3 disclosure requirements. Those may include providing companies additional time to provide Scope 3 disclosures and working with jurisdictions on so-called "safe harbor" provisions, granting companies protection, or reducing their liability for Scope 3 disclosures.
ISSB's next steps will focus on supporting the adoption and implementation of its first two standards and new areas of work which they will consult on in the first half of 2023.
In addition to developing a digital taxonomy and working with the International Accounting Standards Board, these foundational activities will look at interoperability with other bodies, including the Global Reporting Initiative and the European Financial Reporting Advisory Group.
The ISSB is carefully considering all feedback received on its proposals while contemplating the demand to finalize the standards. The board aims to complete deliberations on the proposed standards by the end of 2022, with the final standards issued as early as 2023.
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