OICCI arranged a session on “Understanding IFRS Sustainability Disclosure Standards” in collaboration with A. F. Ferguson & Co. (a member firm of PwC network) at Shell House Pakistan. The objective of the session was to assist members develop better understanding of the IFRS proposed S1 and S2 sustainability reporting standards developed by ISSB (International Sustainability Standards Board) Welcoming the participants, Kashif Shafi, Executive Director, OICCI, discussed the emergence of sustainability as a matter of key concern over the last few years especially in the wake of the devastating climate change induced disasters in the context of Pakistan particularly. He updated the audience on the current role of OICCI to cater to these emerging challenges, starting off the year 2022 with Pakistan Climate Conference, followed by Industry Dialogue on climate related issues and ESG Design Sprint. This session is also in continuation of the efforts to help members understand the emerging regulatory environment particularly within the reporting arena and how businesses need to work collectively for the benefit of society, country and the planet.

Lead speaker Fahim ul Hasan, ESG Partner A. F. Ferguson & Co. (AFF) shared with the participants the emergence of sustainability as a concept of balancing economic performance with environmental and social impacts. Organizations should evaluate the impact of their activities on the employees, society, consumers and suppliers and other stakeholders and need to work for reaching “net-zero” emissions no later than 2050. Realizing the importance of sustainability, the International Financial Reporting Standards (IFRS) Foundation established the International Sustainability Standards Board (ISSB) with a vision to develop comprehensive globally acceptable high-quality IFRS Sustainability Disclosure Standards. The IFRS Sustainability Disclosure Standard 1 requires material information on all significant sustainability related risks and opportunities necessary to assess enterprise value. The audit requirements are not within the ISSB’s remit as of now however regulators may choose to require assurance in their respective jurisdictions.

Standard 2 is related to climate related disclosures and requires the disclosure of material information about significant climate-related risks and opportunities. The climate strategy of an organization should look into the impact of an organization’s operation on the world and the impact of the world on organization’s business. Governance, Strategy, Risk Management and Matrices & Targets are the four pillars of Sustainability Standards. The recent adoption of the Corporate Sustainability Reporting Directive (CSRD) by EU shall require businesses to include mandatory sustainability disclosures, including information about targets and progress towards achieving them, companies will face increased scrutiny on ESG strategy and performance. This has the potential to affect the way companies do business, who they do business with and how capital is allocated. During the session, members asked various questions and shared their thoughts on different aspects of the Disclosures.

Closing the session, Kashif Shafi appreciated the efforts of Fahim ul Hasan and Omer Salman from A. F. Ferguson & Co. He also thanked the participants for their active participation.