Released on March 31 by the International Sustainability Standards Board (ISSB), the Exposure Draft Climate-related Disclosures (the Exposure Draft) include ISSB expectations with respect to the identification, measurement and disclosure of climate-related risks and opportunities.

Highlights of the requirements:

• Governance : Disclosure of the governance processes, controls and procedures used to monitor and manage climate-related risks and opportunities.

• Strategy: Disclosure of information that will help understand the strategy used to address climate-related risks and opportunities (e.g. how information about climate-related risks and opportunities inform management’s strategy and decision-making; the current and the anticipated effects of climate-related risks and opportunities on the entity’s business model…).

• Risk management: Disclosure of information concerning how climate-related risks and opportunities are identified, assessed, managed and mitigated (e.g. the process, or processes, used to identify, assess and prioritize climate-related opportunities; the process, or processes, it uses to monitor and manage the climate-related risks…).

• Metrics and targets—Disclosure of information on the metrics and targets used to manage and monitor an entity’s performance in relation to climate-related risks and opportunities (e.g. performance and outcome measures that support the qualitative disclosures across governance, risk management and strategy disclosure requirements…).

The aforementioned disclosures would enable users of an entity’s general purpose financial reporting to ‘assess the effects of significant climate-related risks and opportunities on the entity’s enterprise value, to understand how the entity’s use of resources support the entity’s response to significant climate-related risks and opportunities, and to evaluate the entity’s ability to adapt to significant climate-related risks and opportunities’.

Comments on the proposal are requested by 29 July 2022.