Letter to IFRS Foundation on Proposed Amendments to SASB Standards and IFRS S2
June 23, 2026
June 23, 2026
IFRS Foundation
Columbus Building
7 Westferry Circus
Canary Wharf
London, E14 4HD
RE: Exposure Draft — Proposed Amendments to the SASB Standards and IFRS S2 Industry‑Based Guidance
Dear International Sustainability Standards Board:
The Virginia Society of CPAs (VSCPA) Accounting & Auditing Advisory Committee has reviewed the Exposure Draft (ED) — Proposed Amendments to the SASB Standards and IFRS S2 Industry‑Based Guidance, issued by the International Sustainability Standards Board (ISSB). The VSCPA is the leading professional association in Virginia dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of nearly 11,000 individual members who actively work in public accounting, private industry, government, and education.
The Committee appreciates the Board’s continued efforts to enhance the decision‑usefulness, comparability, and international applicability of the SASB Standards through a broadened outreach approach. To that end, our comments reflect a financial reporting perspective grounded in what the Committee believes are generally understood stewardship and financial reporting principles. The Exposure Draft (ED) proposes important improvements, including alignment of terminology with IFRS S1 and S2, expansion of disclosure topics (e.g., ecological impacts, community relations, labor conditions), and refinement of metrics across the Agricultural Products, Meat/Poultry/Dairy, and Electric Utilities & Power Generators Standards.
We support the disclosure of information that could reasonably be expected to be of importance to users such as an entity’s cash flows, access to finance, or cost of capital consistent with a financial materiality and decision-usefulness lens as articulated in IFRS S1 and S2. To that end, our observations focus on four areas: (1) lack of socio‑economic and life‑cycle cost information; (2) no requirement for emissions ranges; (3) cost‑benefit considerations and materiality application; and (4) restoration reporting (end‑state vs. in‑progress).
1. Lack of Socio‑Economic and Life‑Cycle Cost Information
Industry metrics for Agricultural Products, Meat/Poultry/Dairy, and Electric Utilities (e.g., FB‑AG‑160a.1; FB‑MP‑160a.5; IF‑EU‑160a.1) focus on environmental impacts but do not incorporate socio‑economic effects or life‑cycle cost implications. Key socio‑economic factors that directly influence enterprise value such as rural economic dependencies, labor market constraints, food affordability, and community‑level impacts do not appear to be consistently reflected in the metric set.
Committee Observations: For financial reporting to be most useful to its readers, we believe it should address stewardship, operating performance, and sustainability of services holistically and over time. From a stewardship perspective, users benefit from understanding how socio‑economic conditions influence long‑term service sustainability, regulatory exposure, and resource condition. These factors can materially affect cash flows, access to finance, cost of capital, and may understate enterprise‑value‑relevant risks or opportunities.
Recommendation: The ISSB should consider whether selected socio‑economic or life‑cycle indicators such as labor market constraints, food affordability, and community‑level impacts, particularly those with demonstrated financial relevance, should be incorporated or cross‑referenced to improve completeness of information and stewardship alignment.
2. No Requirement for Emissions Ranges (Optimistic vs. Pessimistic)
GHG metrics across industries remain point estimates and do not require disclosure of ranges, uncertainty bands, or scenario‑based emissions pathways. While these metrics provide important information, they remain point estimates. IFRS S2 requires scenario analysis, yet the ED does not specifically require disclosure of emissions ranges, uncertainty bands, or scenario‑based emissions pathways.
Committee Observations: Users benefit from understanding risk and uncertainty affecting future operations and to that end, knowing the underlying assumptions as well as potential alternate outcomes would enhance their understanding. For example, long‑term sustainability reporting may require scenario‑based information reflecting optimistic, pessimistic and probable to remote outcomes. Single point estimates seem to infer a precision that does not exist. As a result, users cannot assess the sensitivity of emissions outcomes to different assumptions; an important omission for risk‑sensitive industries.
Recommendation: The Board should consider requiring emissions ranges or uncertainty‑based metrics, where material, accompanied by scenario assumptions.
3. Cost–Benefit Considerations and Materiality Application
BC43–BC47 discuss cost‑benefit considerations, particularly regarding GHG metrics, but do not fully explain how these considerations were applied across other topics (e.g., water, land use, biodiversity).
Committee Observations: Financial reporting should balance cost‑benefit without omitting material stewardship information. For example, regarding land use, material upstream scope 3 costs such as agricultural fertilizer and feed impacts, may very well influence a decision maker or other financial statement users.
Although the ED partially addresses cost‑benefit considerations, it does not seem to provide a transparent rationale for why certain metrics (e.g., upstream water use, land transformation, methane disaggregation) were excluded despite their materiality in several industries.
Recommendation: The ISSB should consider (1) expanding its explanation of cost‑benefit trade‑offs and clarify how proportionality principles were applied to all value‑chain risks, if material [including how materiality is intended to be applied consistently across topics (e.g. GHG, water, land use, biodiversity)], and (2) clarifying the ED to ensure a more internal consistency among the topics and avoid potential mixed signals across the guidance. These enhancements would improve transparency and support consistent materiality application.
4. Restoration Reporting: End‑State vs. “Restoration in Progress”
All three industries use the same metric structure: “(1) Total spatial footprint, (2) area disturbed, and (3) area restored.” (e.g., FB‑AG‑160a.1; FB‑MP‑160a.5; IF‑EU‑160a.1). These metrics capture only completed restoration, not restoration underway.
Committee Observations: Resource and asset managers focus on assessing and reporting on condition, use, and changes over time for their portfolio holdings such as equipment, infrastructure and land. Effective stewardship emphasizes ongoing environmental responsibilities, not just end‑state outcomes. By reporting only “area restored,” the ED omits critical information about restoration in progress, timelines, and restoration liabilities. This creates a static picture that does not reflect the dynamic nature of ecological recovery or long‑term obligations.
Recommendation: The ISSB should consider adding a metric for restoration in progress, such as: area under active restoration; expected restoration timelines; percentage of disturbed land with approved restoration plans. The Committee believes that this would better align with stewardship principles and provide users with a more accurate view of long‑term environmental obligations.
Conclusion
The Exposure Draft represents meaningful progress toward aligning SASB Standards with IFRS S1 and S2. However, from a stewardship and financial reporting principles perspective, the ED would benefit from deeper consideration of: socio‑economic and life‑cycle cost effects, uncertainty and emissions ranges, transparent cost‑benefit reasoning, and restoration as a process, not just an end‑state.
Addressing these areas would strengthen the decision‑usefulness, comparability, and completeness of the resulting disclosures and better align them with stewardship and financial reporting principles.
The VSCPA appreciates the opportunity to respond to this ED. Please direct any questions or concerns to VSCPA Vice President, Advocacy & Pipeline Emily Walker, CAE, at ewalker@vscpa.com or (804) 612- 9428.
Sincerely,
Elissa Obillo, CPA
Chair 2026-2027
VSCPA Accounting & Auditing Advisory Committee
VSCPA Accounting & Auditing Advisory Committee 2026-2027
Elisa Obillo, CPA — Chair
Domenic Savini, CPA — Vice Chair
Scott Cohen, CPA
Jonathan Head, CPA
Clarissa Hoffman, CPA
Joshua Keene, CPA
Daniel Martin, CPA
John McIntosh, CPA
Kendra Morgan, CPA
Brook Peterson, CPA
Michael Phillips, CPA
Amy Stokes, CPA
Clara Tang, CPA
Charles Valadez, CPA
Anna Wagner, CPA
Patrick Wunderlich, CPA
Natalya Yashina, CPA