Many Australian and New Zealand chartered accountants may be familiar with India as a land of fascinating history and vibrant culture, as well as a foodie’s delight.

But those attending the recent World Congress of Accountants 2022 (WCOA) in Mumbai would have seen another, eye-opening side to the subcontinent.

An exhilarating opening ceremony played out over two hours with a colourful series of performers, dances, music and colour showcasing Indian culture and history.

But an overriding message at the congress is that India is now a land of growth and opportunity, on the cusp of becoming an economic superpower.

With a GDP of some US$3.5 trillion, India is now the world’s fifth largest economy, behind the US, China, Japan and Germany.

It’s tipped by many to become the third largest economy in the world by 2030.

India has some 350,000 chartered accountants who are members of the Institute of Chartered Accountants of India (ICAI), and some 750,000 accounting students undertaking the CA course.

Establishing an international language

One thing they – and CAs in Australia and New Zealand – will have to have to brush up on are the sustainability disclosure standards being finalised by the International Sustainability Standards Board (ISSB).

The ISSB was established only a year ago to create an international language on reporting sustainability risks and opportunities.

It’s a big job, with a tight timeframe.

Those draft sustainability disclosure standards were in the spotlight at a plenary session at WCOA with some key messages for all CAs to take on board.

“We know we need to work with others,” said Sue Lloyd, ISSB’s vice-chair.

“We want to work in partnerships with jurisdictions so they can use our standards as a base, with incremental disclosures to meet broader needs.”

The consultations and forging of partnerships are already well under way.

At the COP28 climate change meeting in Egypt in early November, the ISSB announced global partnerships with some 20 organisations, including the Global Reporting Initiative.

Lloyd reported on the consultations ISSB had earlier this year with CA ANZ members and many other bodies – and the next steps in finalising and getting the standards adopted.

There are two draft standards: IFRS S1 General Requirements Standard; and the IFRS S2 Climate-related Disclosures Standard.

High interest in exposure drafts

Lloyd said the draft standards went out for comment for 120 days, and the ISSB received some 1,400 letters of comment.

“The first thing I’ll say is we were delighted with the level of interest in our exposure drafts,” she said.

“They told us we were moving quickly and should continue with that momentum.

“There was also a lot of support for the specific proposals in our documents but a lot of requests for more guidance and more explanation which reinforced to me the fact that sustainability reporting is so new to so many.”

And there was one recurring bit of feedback.

“People want our global baseline to be something that can be truly used around the world,” Lloyd said.

“People don’t want us to establish standards that work very well for large, well-resourced companies in developed economies.

“People want our standards to be capable of truly being applied globally for smaller companies and emerging markets.

“So a lot of what we’re doing in the re-deliberations is make sure that where we can we allow simpler versions of our disclosures or extra time to enable a comprehensive use of our standards across stakeholders types around the world.”

An urgency for sustainability reporting

Sustainability reporting might be new, but there’s an existing yardstick we should bear in mind.

“Ultimately, what we need for this to be successful is for our standards to be used around the world and for the information that’s supplied when companies apply our standards to be of the same level of robustness and quality that investors can be as confident in the sustainability reporting as they are in the financial statements,” Lloyd said.

“We want sustainability reporting to be brought to that mainstream financial reporting quality.”

“We want sustainability reporting to be brought to that mainstream financial reporting quality.”

Lloyd, a New Zealander who was appointed ISSB Vice-Chair in January 2022, also outlined the next steps in relation to the sustainability disclosure standards.

She said the ISSB intends issuing the final standards as early as possible in 2023, with efforts then focusing on their adoption and application, and consulting on a proposed digital taxonomy.

Once those have been ticked off, CAs will get a chance to help determine what should go on ISSB’s to do list.

“We are going to ask you all early next year, in the first half, what you think we should work on next,” Lloyd said.

“What is the most important thing for our board to focus on after we finish our climate standard and our general requirements document?

“We’ll give you our ideas and a consultation document but we really want to hear from you what you think is important so that we can help deliver the information that the capital markets need.”