Making the requirements proportionate

The ISSB has provided a number of mechanisms to address proportionality. These include the following.

For example, companies will use scenario analysis to assess their climate resilience. In making this analysis, companies will:

• consider all reasonable and supportable information available without undue cost or effort and take an appropriate approach depending on their specific circumstances; 
• have relevant guidance materials; and
• have the option of applying the temporary transition relief from providing comparative information in the first year of application. 

These proportionality mechanisms may not be available to all companies and jurisdictions need not include them in local requirements.

The ISSB is aiming to make the standards easier to apply. Companies need to understand what they need to do to be ready for reporting under the standards. They also need to have a plan to improve their reporting after initial application because some of the available reliefs are only temporary. The ISSB expects that as companies’ experience of reporting develops, the level of analysis and disclosure will increase over time.

Do not delay starting your implementation project. The ISSB has provided ways to help with transition but companies will still need to do a lot of work in preparing to apply the standards. So what can be done now?

• Read our guide for more on the standards, including any applicable proportionality mechanisms.
• Perform an impact assessment to understand where gaps exist between your current reporting and the standards.
• Engage with your local standard setter to understand how it plans to introduce the requirements and whether any proportionality mechanisms may be permitted.