Staff at the International Sustainability Standards Board (ISSB) have identified substantial diversity in the way jurisdictions around the world are accounting for biodiversity, ecosystems and ecosystems services (BEES) and human capital for sustainability reporting purposes, survey data presented to the board show.

This diversity, the board’s October meeting round heard, could open the door to the ISSB consolidating this landscape through its policy of setting a global baseline in sustainability disclosures.

ISSB member Elizabeth Seeger said: “Thank goodness we’re working on these topics because, you know, preparers have to deal with this fragmented landscape of disclosure requirements. And I think it just goes to reinforce for me the support I have really for this global baseline approach.”

Survey findings

The findings are based on responses to a staff-devised survey from 26 members of the board’s Sustainability Standards Advisory Forum.

The board’s 24 October discussion builds on the ISSB’s decision earlier this year to pursue research on both BEES and human capital following the conclusion of its first two-year agenda consultation.

The first phase of the research will focus on gathering evidence of investor interest, financial implications, existing standards and frameworks, and current disclosure practices by companies.

The second phase involves a more in-depth analysis to extract relevant insights and implications from the initial research.

From their soundings so far, the staff said that of the 26 jurisdictions surveyed, almost all have mandatory requirements for companies to disclose information on biodiversity, ecosystems, and/or human capital, with most requirements covering both areas.

Multi-purpose reporting objectives

These disclosure mandates, largely enforced by securities regulators and often applying specifically to listed companies, aim to meet the needs of both investors and other stakeholders. A limited number of jurisdictions have targeted these disclosures specifically to meet the needs of investors.

Additionally, most of these requirements have been implemented since 2020, although some date back to the 2010s.

In terms of the specifics, the research has discovered that “most jurisdictions” have mandatory BEES disclosure requirements, generally covering topics like water, waste, and biodiversity.

Generally, there is no significant difference in the information disclosed for investors compared to broader stakeholders.

More outreach, research planned

However, staff said further research is needed to pinpoint investor-relevant information, with “many jurisdictions monitoring the evolution of global initiatives” on the topic like the ISSB and Taskforce on Nature-related Financial Disclosures (TNFD).

As for human capital, staff reported that most jurisdictions have mandatory human capital disclosure requirements, with investor-focused ones commonly covering diversity, pay, training, and health and safety.

While broader stakeholder requirements include additional topics, some jurisdictions are updating regulations and monitoring global regulatory developments to refine human capital disclosures.

In terms of the research focus shifts from here, staff said they would engage with survey respondents to identify investor-relevant information as well as research carried out in individual jurisdictions that could inform the board’s thinking.

SASB standards a focus

The relevance of the board’s work goes beyond any future standard-setting work on BEES and human capital, staff said, noting it was “highly interconnected with the work to further enhance the SASB [Sustainability Accounting Standards Board] standards.” 

This work, they said, could also be relevant to the board’s “further engagement on industry-specific disclosure”.

The ISSB has already added a separate work stream dealing with so-called enhancements to the legacy SASB.

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