Disclaimer: This website is not an official GS1 publication and is currently in development. The content, mappings, and AI-generated responses are for testing and demonstration purposes only and should not be used for compliance decisions or official reporting. Always refer to official GS1 documentation and regulatory texts for authoritative information.
EFRAG submitted a Comment Letter to the ISSB regarding proposed SASB amendments, urging greater alignment with ESRS to reduce complexity for companies operating under both CSRD and global standards. EFRAG specifically recommended changing the wording from 'shall' to 'may' regarding the use of SASB standards, positioning them as optional guidance for materiality assessments rather than mandatory reporting obligations.
This event has sufficient information for decision-making.
Understanding what changed and why it matters for your decisions.
The market assumed that the ISSB's proposed amendments to SASB standards, which currently use 'shall refer to and consider,' would impose a near-mandatory requirement for entities using IFRS S1/S2 to utilize SASB metrics, potentially leading to significant double reporting burdens for companies also complying with the comprehensive and mandatory ESRS/CSRD framework in Europe.
EFRAG explicitly recommends that the ISSB change the wording from 'shall' to 'may' regarding the use of SASB standards. This clarifies EFRAG's position that SASB should function strictly as a library of non-mandatory, industry-specific guidance to support materiality assessments under ESRS, thereby minimizing the creation of new, potentially conflicting reporting obligations.
The potential regulatory trajectory for the global use of SASB standards has shifted from a strong mandate ('shall') toward optional guidance ('may'), contingent on ISSB accepting EFRAG's influential feedback. This feedback formally highlights the regulatory conflict between the mandatory, detailed ESRS requirements and the proposed strong obligation of the SASB framework, increasing pressure for global alignment.
The fundamental structure of the CSRD/ESRS framework remains mandatory for in-scope EU entities, and the ISSB's IFRS S1 and S2 standards remain the global baseline for financial materiality sustainability reporting. The need for companies to conduct robust, double materiality assessments under ESRS is unchanged.
Stakeholders should monitor the ISSB's final response to EFRAG's letter, as acceptance would significantly reduce the mandatory reporting burden associated with SASB metrics for ESRS reporters. Companies should continue preparations for ESRS compliance but can potentially budget less for mandatory SASB data collection if the 'may' recommendation is adopted, focusing SASB resources only on areas where it directly supports ESRS materiality assessments.