[ESMA 32-992851010-1019 ] Letter to International Sustainability Standards Board (ISSB) on the consultation to enhance the international applicability of the SASB Standards

ESMA submitted its response to the ISSB’s consultation, which focuses on enhancing the global applicability of the SASB Standards. The response outlines ESMA’s insights and recommendations regarding the Exposure Draft titled “Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates.“
ESMA commends the ISSB for its effort to ensure that non-climate-related metrics within the SASB Standards can be effectively applied irrespective of jurisdiction or accounting principles. It underscores its role in corporate sustainability reporting, contributing to the development of ESRS through involvement with the EFRAG.
The feedback emphasizes cross-jurisdictional comparability of disclosures, suggesting that the reliance on internationally recognized frameworks and guidance should be the favored approach. While ESMA appreciates the proposed revision approaches, it recommends consolidating Revision Approaches 4 and 5, enabling the consideration of both retaining existing metrics, and introducing new ones developed by the ISSB. ESMA notes the necessity for transparency in the criteria used for selecting these metrics.
ESMA seeks clarity on the subsequent steps in the exercise and recommends explicitly stating that the amendments to the standards will undergo further consultation. It also envisions a broader overhaul of the SASB Standards, involving reconsideration of material topics, the introduction of principles-based disclosures, and the assessment of existing metrics‘ pertinence.
In alignment with its commitment to digital taxonomies for sustainability reporting, ESMA supports updating the SASB XBRL Taxonomy to reflect modifications in the SASB Standards. It calls for coordination between the ISSB’s efforts and the ongoing European initiatives for digital taxonomies to ensure seamless interoperability.