Asia Investor Group on Climate Change

PO Box Q937 Queen Victoria Building
NSW 1230, Sydney

e: info@aigcc.net
w: https://www.aigcc.net/

29 July 2022
Emmanuel FaberChair, International Sustainability Standards Board (ISSB)
Ref: Feedback on Exposure draft IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures
The Asia Investor Group on Climate Change (AIGCC) welcomes the opportunity to commenton the General Requirements Exposure Draft and the Climate Exposure Draft published bythe International Sustainability Standards Board in March 2022.
AIGCC members include over 60 Asian and international institutional investors active in 11markets with over USD 36 trillion funds under management. AIGCC is also a network partnerof the Investor Agenda, a coalition of seven investor groups - AIGCC, Ceres, Institutional
Investors Group on Climate Change (IIGCC), Investor Group on Climate Change (IGCC), CDP,Principles for Responsible Investment (PRI) and UNEP Finance Initiative, working
collaboratively on accelerating investor action towards a net-zero emissions economy, as wellas the Asia network partner supporting the Paris Aligned Investor Initiative and the Net Zero
Asset Managers Initiative.
AIGCC supports the development of consistent sustainability reporting standards globally.
While several markets have implemented mandatory disclosure standards, including many
major Asian markets, there is some level of fragmentation in the standards that are beingimplemented. It is important now more than ever to develop a comprehensive and globallyinteroperable standard for sustainability reporting. Further delays in developing a global
standard for sustainability disclosures will result in increasing costs, risks for the investmentcommunity as well as reporting entities operating internationally, and ultimately result indifficulties to give effect to the much-needed sustainability transition.
AIGCC strongly supports the work of the ISSB, and the collaboration set up between the ISSB
and the Global Reporting Initiative (GRI) to ensure good international convergence on globallyaccepted sustainability disclosure standards. We support the alignment of the ISSB exposure
draft on climate disclosures with the Taskforce on Climate-related Financial Disclosures(TCFD) recommendations since the TCFD recommendations have already been accepted andmandated across several major Asian and global markets. We also appreciate ISSB’s efforts
to form a working group of jurisdictional representatives to help work closely with regional
governments and regulators on implementation and standardisation of disclosure standards
across regions.

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Asia Investor Group on Climate ChangeWith this overview in mind, we have the following high-level comments on the General
Requirements Exposure Draft and the Climate Exposure Draft published by ISSB in March
2022:
Firstly, the exposure drafts should be as precise as possible regarding the scope ofinformation related to sustainability and climate that is being targeted by the standards byfurther clarifying definitions and explaining differences between the terms used in the draft
relating to the scope such as ‘significant’, ‘materiality’, etc. Subjective interpretation of theseterms could result in disclosure documents with varying levels of information resulting
ultimately in a failure to develop a standard that is able to elicit the required extent ofessential information from reporting entities.
Secondly, linking the information disclosure on impacts of company on people, planet,environment, and economy as it relates to enterprise value alone, will be seen as inadequate
by several stakeholders. Disclosure standards should aim to keep up with the growing
information needs of stakeholders that will rely on these sustainability disclosures to makeimportant decisions regarding investments, regulations, compliance, etc. Easy access to thenecessary information pertaining to the direct impact of corporates on the people, planet andenvironment would facilitate faster alleviation of these risks and address related climate
concerns. Investors in Asia are increasingly expecting companies to adopt a double
materiality approach regarding assessing materiality for information disclosure.1 Several
investors have mandates that are more holistic, extending beyond creating financial value
alone and will therefore need access to various kinds of non-financial data regarding theimpact of the business on the environment and society to make crucial decisions to support
sustainability and the net zero transition.
We support that ISSB has adopted a ‘building block’ approach to sustainability standards with
the IFRS standards forming the baseline building block through a common global baseline forclimate-related disclosures beyond which other reporting structures that mandate further
disclosure requirements can operate as well. We recommend that ISSB works closely with GRI
and other bodies that are responsible for reporting standards with a double materiality
approach, to ensure seamless interoperability of the ISSB standards with these otherreporting structures. Also recognising that it may take some time for sustainability standards
to reach global consensus regarding its scope, content, and applicability, we recommend thatthe reporting entities incorporate a broad stakeholder engagement process as a first step
towards developing an information disclosure document to ensure information matters thatare significant to relevant stakeholders are not overlooked in the final disclosure report.

1 See Responsible Investor article on ‘Almost half of Japanese investors call for double materiality approachin disclosures – survey’ (February 2022) here.
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Asia Investor Group on Climate Change

Disclosure standards in other jurisdictions include the double materiality factor - for example,
the European Financial Reporting Advisory Group’s draft European Sustainability ReportingStandards for the Corporate Sustainability Reporting Directive incorporate disclosure
obligations that include entities’ impacts on nature, society, and the climate. Going one stepfurther, the Corporate Sustainability Due Diligence Directive which operates alongside theCorporate Sustainability Reporting Directive and requires companies to integrate ESG due
diligence into all their corporate policies, which must be updated annually. This includes
identification of adverse human and environmental impacts in the operation of the company,
its subsidiaries and throughout its value chain and then creation of preventive action plans
with clear timeline. ISSB should aim to use its influence and position to encourage regulatorsto progress towards such standards for measuring and enabling action on preventing andmitigating impacts to nature, society, and climate.
Thirdly, investors’ priority would be to have access to information as soon as possible, tofacilitate investor action. As several reporting entities have expressed concern regarding theirability to accurately provide forward-looking information, including undertaking scenario
analysis to the extent they are able, it is crucial that they are provided with the required
guidance and tools to be able to comply with these requirements. ISSB should work toaggregate service providers and data experts that will be able to assist reporting entities withthese reporting requirements. More broadly, while these asks may be seen as challenging for
certain entities, it is crucial that the disclosure requirements do not hold them back fromundertaking the reporting process under the prescribed standard. While scenario analysis
should continue to remain the preferred option to understand the resilience of an entity’s
strategy to assess impacts of climate risks, there should be some level of flexibility built in fora fixed transition term as companies adjust, such as alternative methods or other options.
Fourthly, efforts are underway to provide more clarity on how the current implemented
disclosure standards differ across jurisdictions, specifically for the benefit of international
investors and corporates. While implementing the ISSB standards, to facilitate faster andeasier implementation, the ISSB should aim to elaborate upon how the approach of the ISSB
standards compares and overlap with other sustainability disclosure frameworks that arewidely used in each market.
Fifthly, as recommended by the other Investor Agenda network partners as well, werecommend that the ISSB incorporates within the climate disclosure requirements, thedisclosure indicators established by the Climate Action 100+ Net Zero Company Benchmark2
and recommended disclosures under the Paris Aligned Investment Initiatives’ Net Zero

2 See Climate Action 100+ Net Zero Company Benchmark here; more details available here.

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Asia Investor Group on Climate Change

Investment Framework3 and the Investor Agenda’s Investor Climate Action Plans expectations
ladder.4
In conclusion, AIGCC warmly welcomes the ISSB Exposure Drafts IFRS S1 GeneralRequirements for Disclosure of Sustainability-related Financial Information and IFRS S2Climate-related Disclosures as leap forward in ensuring transparent and reliable disclosureof sustainability and climate-related information.
Please do reach out to us for any further clarification or assistance that we may provide. We
look forward to continued engagement in development of the disclosure standards.

Yours sincerely,Rebecca Mikula WrightCEO, Asia Investor Group on Climate Change (AIGCC)
About the Asia Investor Group on Climate Change
The Asia Investor Group on Climate Change (AIGCC) is an initiative to create awareness and encourage
action among Asia’s asset owners and financial institutions about the risks and opportunities
associated with climate change and net zero investing. AIGCC members come from 11 different
markets in Asia and internationally and include asset owners and managers with a combined AUM ofover US$35.8 trillion. https://www.aigcc.net/
Contact Us
E: anjali.viswamohanan@aigcc.net
W: https://www.aigcc.net/

3 See Paris Aligned Investment Initiatives’ Net Zero Investment Framework here.
4 See Investor Climate Action Plans expectations ladder here; guidance available here.

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Asia Investor Group on Climate Change