Comments by Shift on the ISSB Exposure Draft (Climate-Related Disclosures) 

Shift welcomes the publication by the ISSB of a draft Climate standard for public consultation. Our organizational expertise is in the human dimensions of sustainability, including as they relate to climate change and climate change strategies.

Climate change can have knock-on effects across regions and sectors, through interconnected socioeconomic and financial systems. The Bank for International Settlements (BIS) describes climate change as “a new type of systemic risk that involves interacting, nonlinear, fundamentally unpredictable, environmental, social, economic and geopolitical dynamics”. It goes on to state: “With the complex chain reactions between degraded ecological conditions and unpredictable social, economic and political responses, with the risk of triggering tipping points, climate change represents a colossal and potentially irreversible risk of staggering complexity.” 

It is in light of these important interconnections that we submit these comments to the ISSB to urge that the draft standard be revised to reflect a more holistic picture that integrates the human dimensions and implications of climate change, climate mitigation, and climate adaptation. Without this, we will not only fail to achieve a just transition to carbon-neutral economies but will see continuing barriers to the success of undertakings climate change strategies, with consequences for business and the providers of capital, among others.

Comments by Shift on the ISSB Exposure Draft (General Requirements) 

Shift welcomes the opportunity to contribute our perspective on the Exposure Draft published by the International Sustainability Standards Board (ISSB): IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.

This document contains our comments on the former in which we offer inputs from the perspective of the leading center of expertise on the UN Guiding Principles on Business and Human Rights. The UNGPs are the global authoritative standard concerning how companies impact employees, workers, communities, and consumers.

Shift looks forward to continued engagement with the ISSB as it carries out is important and timely work.

Overarching Comments by Shift on the Draft European Sustainability Reporting Standards

Shift welcomes the publication of the first draft set of European Sustainability Reporting Standards and commends the European Financial Reporting Advisory Group on producing a rich and important set of draft standards in a short period of time. While we are responding separately to a number of the survey questions circulated as part of the consultation process, we recognize that these do not allow for the full expression of views on the draft standards and therefore submit this letter also to complement our survey responses. In it we address issues related to:

  1. The architecture of the cross-cutting standards
  2. The articulation of the materiality assessment process
    • Providing clarity on the central role of due diligence
    • Focusing on the materiality process rather than ‘rebuttable presumptions’.
  3. Alignment with international standards and the definition of value chains
  4. The relevance of governance and business models to information on due diligence
    • Relevance of governance disclosures to alignment with due diligence standards
    • Relevance of business models as source of impacts in the context of due diligence
  5. The significance of engagement with affected stakeholders
    • Value of clearly distinguishing affected stakeholders and their particular relevance
    • Need for cross-cutting disclosures on engagement with affected stakeholders
  6. The value of the architecture of the social standards
    • Value of division into standards based on stakeholder group
    • Need for performance metrics for all stakeholder groups in future standards