ESGin3: Sustainability standards and materiality (https://lnkd.in/e7F2KS54) Recent developments in strategic relationships between #ISSB and each of the Transition Plan Taskforce (TPT), Greenhouse Gas Protocol (GHG Protocol), CDP, Taskforce on Nature-related Financial Disclosures (TNFD) and Global Reporting Initiative (GRI) illustrate how collaboration is key to driving harmonization of sustainability standards and frameworks. And harmonization can be key to accelerating progress around 𝘪𝘯𝘵𝘦𝘳𝘰𝘱𝘦𝘳𝘢𝘣𝘪𝘭𝘪𝘵𝘺 of standards and future 𝘦𝘲𝘶𝘪𝘷𝘢𝘭𝘦𝘯𝘤𝘦 considerations (see my prior LinkedIn post on these topics here: https://lnkd.in/eDrxKsiq). Additionally, building off the momentum of the ISSB and #EFRAG interoperability table published in May, EFRAG released a mapping tool (https://lnkd.in/eJs3MjU5) that shows where the TNFD and European Sustainability Reporting Standards (#ESRS) overlap. At the foundation of sustainability standards is materiality determination criteria, and #IFAC (https://lnkd.in/e6xgisK6) also recently reinforced the importance of a robust materiality assessment in accordance with recognized standards and reporting criteria as a critical step in moving from voluntary to regulated sustainability reporting in a manner that will withstand required independent assurance. Our recent Deloitte Heads Up 𝘜𝘯𝘱𝘢𝘤𝘬𝘪𝘯𝘨 𝘵𝘩𝘦 𝘋𝘰𝘶𝘣𝘭𝘦 𝘔𝘢𝘵𝘦𝘳𝘪𝘢𝘭𝘪𝘵𝘺 𝘈𝘴𝘴𝘦𝘴𝘴𝘮𝘦𝘯𝘵 𝘜𝘯𝘥𝘦𝘳 𝘵𝘩𝘦 𝘌.𝘜. 𝘊𝘰𝘳𝘱𝘰𝘳𝘢𝘵𝘦 𝘚𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘙𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨 𝘋𝘪𝘳𝘦𝘤𝘵𝘪𝘷𝘦 provides really important practical insights on performing a double materiality assessment in accordance with #CSRD and ESRS, with consideration to the #SEC Climate Disclosure Rule and ISSB standards and related materiality criteria as well. A few key points: 1. 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀: There are four general steps to consider when conducting a #DMA process and related internal controls. Judgment is required to design a process that (1) is in compliance with the standards and (2) reflects the entity’s specific facts and circumstances. Several examples are included to illustrate practical decision-making considerations. 2. 𝗔𝘀𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗿𝗲𝗮𝗱𝗶𝗻𝗲𝘀𝘀: A key step in obtaining assurance over an entity’s CSRD compliance is to capture management’s judgments and conclusions in writing throughout the DMA process. 3. 𝗜𝗻𝘁𝗲𝗿𝗽𝗹𝗮𝘆 𝘄𝗶𝘁𝗵 𝗦𝗘𝗖 𝗮𝗻𝗱 𝗜𝗦𝗦𝗕: While the guidance on financial materiality in ESRS and in the SEC’s definition of materiality are different, many of the underlying concepts are generally similar and, in many cases, overlapping. However, the double materiality approach under ESRS further requires companies to disclose matters that may be material from an impact perspective. And EFRAG and the ISSB noted that their guidance is aligned in terms of financial materiality. #deloitteesgnow
claudio falasca
4mo
Thanks for sharing
gracias Por la información
Kristen Sullivan excellent comprehensive analysis. Thank you .
Leader with USI Audit and Assurance Practice for US firm and Member firm. Leader for Commercial Chemicals sector, Internal Controls and Co lead Goodwill Center of Excellence.
4moVery informative