A new AICPA and CIMA resource answers questions and provides perspective for management accountants related to cornerstone sustainability standards in Europe.
The resource, Sustainability Framework and Standards — the European Union’s Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), breaks down the CSRD and ESRS requirements for finance professionals:
- Why are sustainability-related disclosure standards needed?
- How were the CSRD and ESRS developed?
- When is reporting under the CSRD and ESRS required?
- What are the general requirements of the ESRS?
- Who will encounter the CSRD and ESRS requirements?
The resource is part of a series exploring the topic of sustainability, business, and the finance professional’s key role. The items explore integrating sustainability into long-term decision-making and how to incorporate these issues into internal and external reporting.
IPSASB shifts approach to first public sector climate standard
The International Public Sector Accounting Standards Board (IPSASB) said in a news release that it is moving towards a phased approach in producing government and public sector guidance through its climate-related disclosure project.
In response to a “record number of comments” on its exposure draft of the world’s first climate-related disclosure standard, IPSASB recognised that “having different reporting perspectives in a single standard would not meet the needs of the public sector”, a news release said. Instead, the board has split the project into two phases:
- Phase 1: IPSASB will finalise the first public sector sustainability reporting standard, Own Operations, focusing on how public sector entities disclose climate-related risks and opportunities to their own operations.
- Phase 2: The board will develop a separate standard, Public Policy Programs, for those specific public sector entities responsible for delivering climate-related public policy programmes and their outcomes.
IPSASB intends to vote on final pronouncements for the Own Operations standard in December, the release said. Following the first standard’s approval, the board will consider stakeholders’ feedback on the proposed Public Policy Programs guidance with the aim of finalising the standard at the end of 2026.
IASB begins IFRS 16 review, addresses climate-reporting concerns
As part of its post-implementation review of IFRS 16, Leases, the IASB issued a request for information to evaluate whether IFRS 16 is working as intended for investors, companies, auditors, and regulators.
IFRS 16 aimed to improve information that companies provide about their lease arrangements to investors and other users of financial statements, a news release said. The standard came into effect in 2019.
Feedback on the standard can be submitted online. The comment period is open until 15 October.
In another release, the IASB announced the planned presentation of seven illustrative climate-related scenario examples to address stakeholder concerns about inconsistencies between information disclosed in the financial statements and in other reports.
The examples illustrate principles that apply broadly to all types of uncertainties, the release said.
The IASB plans to publish a near-final draft of the examples early in the third quarter of 2025 and expects to issue the final document in October.
IFAC launches sustainability tool for SMEs
The International Federation of Accountants (IFAC), in collaboration with a coalition of 16 accounting bodies across the world, launched an online tool designed to help small- and medium-size entities (SMEs) improve their sustainability practices.
According to a news release, the Small Business Sustainability Checklist provides practical steps to future-proof businesses and help SMEs maximise “the benefits of incorporating sustainability into their strategy” and business operations.
“This is all about building sustainable futures for both accounting practices and their clients, to face the global standards of today and tomorrow,” IFAC CEO Lee White said in the release.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
