Financial Services Commission Attends Sustainability Standards Advisory Forum Meeting... "Discussion on ESG Disclosure Standards"

The Sustainability Standards Advisory Forum (SSAF), the official advisory body of the ISSB (International Sustainability Standards Board), which is establishing global sustainability disclosure standards, has officially begun its operations.

On the 23rd, the Financial Services Commission announced that it participated in the first SSAF meeting held on the 17th in Frankfurt, Germany. SSAF is the official advisory body of the ISSB, established by the IFRS Foundation last December. The ISSB is developing global sustainability disclosure standards. It is composed of governments or standard-setting bodies from 13 countries including Korea, Europe, the UK, China, and Japan. Major institutions such as the U.S. Securities and Exchange Commission (SEC) also participate. Korea was appointed as a founding member. The Financial Services Commission and the Korea Accounting Standards Board participate together.

At the first SSAF meeting, discussions were held on ▲ progress in developing IFRS S1 (General) and S2 (Climate) ▲ topics for the next standard-setting ▲ and the linkage between ISSB’s sustainability disclosure standards and IASB’s accounting standards.

In March last year, the ISSB released drafts of IFRS S1 (General) and S2 (Climate) and collected global feedback until July. After reconsidering the major issues raised during the consultation, the final standards will be announced at the end of June. The International Organization of Securities Commissions (IOSCO), a global forum of financial regulators, is also expected to review the ISSB final standards and decide whether to officially endorse them.

The SSAF meeting also included discussions on topics for the next standard-setting. The final standards scheduled to be announced in June this year cover general principles (S1) and the climate sector (S2). Additional standard-setting work will proceed on other environmental, social, and governance areas beyond climate to comprehensively cover sustainability.

Meanwhile, during this meeting, a Memorandum of Understanding (MOU) was signed between the IFRS Foundation and SSAF member countries. The MOU states that while respecting each other’s independence, the IFRS Foundation and SSAF member countries will strive together to develop high-quality ISSB sustainability disclosure standards.

The Financial Services Commission stated, “Through this meeting, we were able to understand the progress of ISSB’s standard-setting,” and added, “We also participated in discussions on the next standard-setting topics, the consultation process for them, and the interoperability between ISSB standards and other major standards.” The next meeting is scheduled to be held in July. The Financial Services Commission added, “Going forward, we will actively participate in global sustainability disclosure standards discussions together with related organizations including the Korea Accounting Standards Board. Additionally, as Korea is preparing to phase in mandatory ESG disclosures starting in 2025, we will also promote the establishment of domestic ESG disclosure standards.”