IFRS and making sustainability data impactful

Agri-businesses are under pressure to disclose and report on sustainability-related risks and opportunities. Increasingly, countries are mandating or planning to mandate these disclosures as part of regular financial reporting.

The new IFRS S1 and S2 sustainability disclosure standards, which subsume existing guidelines like the TCFD, help guide businesses through their reporting obligations.

Robust and trusted reporting must be backed by verifiable data and proof of impact. In this post, we unpack the new IFRS standards and their guidelines for making sustainability data useful and impactful – not just present.

‍

Firstly, what is the IFRS?

The International Financial Reporting Standards Foundation (IFRS) is a not-for-profit, public interest organisation established to develop high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards.

‍

What are the IFRS standards?

• The IFRS S1/S2 sustainability standards are the first-ever sustainability reporting standards developed by the new International Sustainability Standards Board (ISSB).
• The IFRS S1 standard outlines general requirements for the disclosure of sustainability-related financial information. It covers topics such as governance, strategy, and risk management, as well as environmental, social, and governance (ESG) performance indicators.
• The IFRS S2 standard focuses specifically on climate-related disclosures. It requires companies to disclose the impact of climate-related risks on their business and the measures they are taking to address those risks.
• These new standards are designed to provide a consistent and comparable way for companies to report their sustainability-related financial information, and are expected to become a global benchmark for sustainability reporting.

‍

What does it mean for sustainability data to be impactful?

Data collection is only an enabling step - by itself, data is meaningless. To be impactful and useful, data has to meet a number of criteria, which are now included in the IFRS standards:

• Data must have predictive value (the percent of the times that the value is the true value) - e.g. choosing preferred suppliers based on emissions intensity

• Data must have confirmatory value (the data provides feedback on previous evaluations)**
• Data must be comparable (e.g. comparing emissions of different feedstock)
• Comparing data across seasons (time comparison)
• Data must be verifiable (a piece of evidence that requires verification)

• Data must be timely (automatic real-time data using integrations / an API is the gold standard)

• Data must be understandable (easy to read and interpret)

‍

Keen to learn more?

If you’d like to learn more about the IFRS reporting framework and how Geora can help you take the first step, get in touch by starting a live chat with us - we’d love to hear from you! 👉