The International Sustainability Standards Board (ISSB) has released IFRS S1 and IFRS S2, marking a significant milestone in sustainability disclosures for global capital markets. These standards establish a common language for companies to disclose the impact of climate-related risks and opportunities on their business prospects. By providing transparent sustainability information, they aim to enhance trust and confidence in company disclosures, guiding investment decisions.

In response, the Energy & Environment Alliance (EEA), dedicated to achieving net-zero carbon and ESG stewardship in the hospitality industry, has emphasized the importance of these new standards. Ufi Ibrahim, CEO of EEA, expressed that the era of voluntary sustainability action and disclosure has shifted to a mandatory framework.

The standards, which initially focus on materiality disclosure, will revolutionize business operations by integrating sustainability and broader ESG considerations into every aspect of running a company. Effective from the 2024 financial year, the hospitality industry has only a few months to prepare for the adoption of these new disclosure rules.

To provide valuable guidance and collaborate with the IFRS and ISSB in developing sector-specific standards, the EEA has formed a working group comprising industry leaders and experts. The collective input from the industry is crucial, as these requirements will impact all businesses and asset values.

The Alliance calls upon industry leaders, investors, and risk and compliance officers to support the EEA working group. IFRS S1 enables companies to communicate sustainability-related risks and opportunities over the short, medium, and long term, while IFRS S2 outlines specific climate-related disclosures and is meant to be used in conjunction with IFRS S1. Both standards fully incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).