The inaugural publication of the first two IFRS® Sustainability Disclosure Standards1 is a key milestone in the International Sustainability Standards Board (ISSB)’s vision — to create a global baseline for investor-focused sustainability reporting that local jurisdictions can build on.

Better information can lead to better economic decisions. These standards are designed to meet the needs of all companies. They provide a clear idea of what companies need to report on to meet the needs of global capital markets, providing investors with globally comparable information.

Adopting these standards will signify an important change in status, as they will increase the prominence and connectivity of sustainability reporting within the main financial filings. It is important to engage now to understand what this new global baseline will look like and to assess how your company needs to adapt.

Getting ready for sustainability reporting

Realising a global baseline

The ISSB’s first two standards are designed to be applied together, supporting companies in identifying and reporting information that investors need for informed decision making. In other words, information that would affect the assessments that investors make about companies’ future cash flows.

To achieve this, the general standard provides a framework for companies to report on all relevant sustainability-related topics across the areas of governance, strategy, risk management, and metrics and targets.

This is supported by more detailed guidance on reporting on climate-related risks and opportunities in the climate standard. Additional standards covering other topics are expected to follow, but in the meantime companies will use guidance highlighted in the general standard to report on other topics.

The standards will be effective from 1 January 2024. However, it will be up to each jurisdiction to decide whether and when to adopt the ISSB standards. With support from global bodies including International Organization of Securities Commissions (IOSCO4), a rapid route to full adoption is expected in a number of jurisdictions.

In Singapore, a sustainability reporting advisory committee recommends that all listed issuers, including business trusts and real estate investment trusts, align their disclosures with the ISSB from their financial year beginning 2025.

general standard diagram

Driving consistency

Global consistency in sustainability-related disclosure standards is important to helping investors and other capital market participants make informed decisions about the enterprise value of companies.

The ISSB standards are based on existing frameworks and standards, including the Task Force on Climate Related Financial Disclosure (TCFD) and Sustainability Accounting Standards Board (SASB). The ISSB is also committed to working with the Global Reporting Initiative (GRI) to ensure its new investor-focused standards are complementary to and compatible with existing GRI standards, which have a different objective of meeting wider stakeholders’ information needs.

The ISSB has been working closely with jurisdictional standard-setting bodies, such as the European Commission and European Financial Reporting Advisory Group (EFRAG) and the US Securities and Exchange Commission (SEC), to maximise interoperability between its standards and incoming mandatory reporting frameworks.

Connecting sustainability and financial reporting

Going forward, connectivity between financial and sustainability reporting will be a requirement, rather than a mere feature, of good-practice reporting. The ISSB refers to the information disclosed as sustainability-related financial disclosures, demonstrating that disclosures need to be connected with information in financial statements and not a disconnected exercise.

Finance and sustainability teams will need to work closely together to ensure the information disclosed is complementary and based on the same facts and circumstances. While sustainability-related information may differ in nature from information presented in financial statements, it needs to be consistent to the extent possible — regardless of whether financial statements are prepared under IFRS Accounting Standards or other generally accepted accounting principles.

Companies will need processes and controls in place so that they can provide sustainability-related information of the same quality, and at the same time, as their financial statements.

Next steps

Now is the time to prepare to report using these new standards. To get started, read our high-level overview which includes 10 key questions to help you with your preparations. Monitor developments and announcements in your jurisdiction about adopting the standards to understand where and when your company may be in scope.

For more details, please read our sustainability reporting page and keep a lookout for more detailed guidance in our First Impressions publication to be released in July.


1 IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures

Get in touch

At KPMG in Singapore, we are committed to supporting preparers in their journey towards globally consistent, comparable and reliable sustainability reporting. Get in touch with us to explore potential issues, insights and perspectives in your assurance and audit journey.

Pamela Fan

Partner, Audit

KPMG in Singapore


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