Navigating the ISSB standards

In November 2021 the International Financial Reporting Standards (IFRS) Foundation Trustees announced the creation of a new standard-setting board - The International Sustainability Standards Board (ISSB) with the mission to deliver a comprehensive global baseline of sustainability-related disclosure standards that provide investors and other capital market participants with information about companies’ Sustainability-Related Risks and Opportunities (SROs).

The first two standards

IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climaterelated Disclosures) were issued on 26 June 2023.

Entities that follow IFRS Accounting Standards

are not required to also follow IFRS Sustainability Standards. In addition, entities that follow GAAP or any other local accounting framework can adopt IFRS Sustainability Standards, with modifications where needed.

At a glance

The general standard underpins reporting under all IFRS Sustainability Disclosure Standards, defining the scope and objectives of reporting and providing core content, presentation and practical requirements. It requires disclosure of material information on all Sustainability- Related Risks and Opportunities that could reasonably be expected to affect the company’s prospects – not just those related to climate.

The climate standard applies the core content requirements and expands on them with climate-specific reporting requirements – e.g. information on transition plans, scenario analysis and climate-specific metrics and targets. It also provides industry-specific guidance based on the SASB Standards.

For topics other than climate, preparers will need to seek guidance on appropriate disclosures from other sources identified in the general standard – e.g.the SASB Standards.

Over time, it is expected that the ISSB will release additional standards.