The International Sustainability Standards Board (ISSB) was formed on Nov. 3, 2021, at the UN Global Summit to develop global sustainability disclosure standards aimed at providing investors with comprehensive and consistent sustainability information. On June 26, the ISSB released its inaugural financial reporting standards, IFRS S1 general requirements for disclosure of sustainability-related financial information (IFRS S1) and IFRS S2 climate-related disclosures (IFRS S2, together with IFRS S1 the IFRS sustainability disclosure standards). The ISSB sustainability disclosure standards provide reporting standards for disclosures of the relationship between climate and sustainability risks, opportunities and strategies and an entity's financial performance. Additionally, the IFRS sustainability disclosure standards promulgated by the ISSB contribute to the network of sustainability reporting set forth by initiatives such as the task force for climate related financial disclosures (TCFD), the Value Reporting Foundation's integrated reporting framework, and industry-based sustainability accounting standards board (SASB) standards among others. Please be advised that compliance with these standards is currently voluntary globally. However, it is important for companies to be familiar with such trends in disclosure given the U.S. Securities and Exchange Commission (SEC) focus on ESG and sustainability.

IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information

IFRS S1 requires entities to disclose material sustainability-related risks and opportunities that are reasonably likely to impact an entity's liquidity and capital resources in the short to long-term including the following:

• Governance: the governance processes, controls and procedures used for management and oversight of sustainability-related risks and opportunities;
• Strategy: the strategy for management of sustainability-related risks and opportunities;
• Risk Management: the processes used for identification, assessment and management of sustainability-related risks and opportunities; and
• Metrics and Targets: the performance of the entity in light of sustainability-related risks and opportunities.

Further, IFRS S1 provides prescriptive guidelines on the preparation, content and presentation of the disclosures on sustainability-related financial information. Sustainability-related financial information should be prepared for a 12-month period and disclosure included in management's discussion and analysis of financial condition and results of operations or other similar management commentary. If disclosure is provided for longer or shorter periods then an entity should disclose the periods covered, the reasons for the periods covered and a disclaimer that the amounts disclosed for the periods are not comparable to other disclosures. Entities should disclose comparative information for the preceding period for all amounts disclosed in the current reporting period. Entities shall include an explicit statement of compliance if their sustainability-related financial information disclosures comply with the IFRS sustainability disclosure standards.