Demand for more relevant information continues to grow as companies are increasingly exposed to climate and other sustainability-related issues. In response, the new International Sustainability Standards Board (ISSB) is developing IFRS® Sustainability Disclosure Standards (the standards). These will provide a global baseline and be focused on enterprise value.

Companies need to start preparing for reporting under these standards. Two prototype standards – on climate-related disclosures and general requirements for disclosures – provide an indication of the disclosures that may soon be required under the standards. Companies applying the standards will need processes and controls in place to provide sustainability information of the same quality and timeliness as their financial information.

Getting ready now is critical even if the final standards are not identical to the prototypes. Companies that already have the processes in place to produce similar sustainability-related information are likely to find reporting under the final standards easier.

The first two standards may be issued as soon as H2 2022. It will then be for individual jurisdictions to decide whether and when to adopt them. Some public and private companies may choose to adopt them voluntarily – e.g. in response to investor or societal pressure – and so reporting could be as soon as 2022 year-ends.