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The IFSB comments on the ISSB Exposure Drafts IFRS S1 General Sustainability-related Disclosures and IFRS S2 Climate-related Disclosures

Date posted: 29 July 2022

29 July 2022, Kuala Lumpur - The Islamic Financial Services Board (IFSB) submitted a response to the International Sustainability Standards Board (ISSB) on the ISSB’s Exposure Drafts on General Sustainability-Related Disclosures and Climate-Related Disclosures.

The IFSB provided comments on the Exposure Drafts IFRS S1 and IFRS S2 and expressed its strong support for the work of the ISSB in developing a global baseline standard for sustainability and climate-related disclosures. The IFSB strongly supports the convergence and harmonisation of global standards on sustainability and climate-related risks and welcomes the progress made by ISSB towards development of these standards.

The IFSB highlighted in its comments, the need for a clear definition of sustainability, the need to minimise the potential of green-washing and misleading reporting, clearer boundaries on materiality to avoid subjective reporting, clarity on the application of proportionality to smaller entities, as well as the need for sector-specific guidance, among others.

The IFSB is also concurrently working on developing sustainability-related standards for the Islamic financial service industry, and will complement the work of international standard-setters including the ISSB, in addressing the specificities of Islamic finance as per its mandate.