22 November 2022 (Updated 31 August 2023)

What’s the issue?

Sustainability reporting has seen steady growth over the past decade according to our global Survey of Sustainability Reporting, but there is an urgent need for globally consistent and comparable standards to support the information needs of investors. There is currently diversity in what sustainability-related information companies publish and when.

The objective of the International Sustainability Standards Board (ISSB) is to create a global baseline of investor-focused sustainability standards1 that jurisdictional standard-setters can build on. The ISSB is balancing demands for the standards to be effective as early as possible with addressing the practical challenges for companies – including the availability and quality of data.

IFRS® Sustainability Disclosure Standards are effective from 1 January 2024, supported by transition options. It is now up to local jurisdictions to decide how and when they will adopt the standards.

What are the requirements?

The standards are effective for annual reporting periods beginning on or after 1 January 2024. However, adoption of the standards is dependent on local jurisdictions, so the first application date could differ around the world. Companies could choose to apply the standards early – if they apply them together and disclose that they have applied them early.

Companies, in principle, will report sustainability-related financial disclosures at the same time as their financial statements. This is to encourage connectivity and ensure that information is decision-useful for investors. This is consistent with sustainability reporting requirements in certain jurisdictions including the EU2, but not in other jurisdictions where sustainability-related information may be published after the financial statements.

To address practical challenges for companies, the ISSB provides a transition relief to allow companies to report sustainability-related financial disclosures after their financial statements in the first year of application only. However, the relief does not override local jurisdictional requirements.

If a company takes this relief, then it reports its first annual sustainability-related financial disclosures alongside its next interim financial reporting – i.e. interim reporting published during its second annual reporting period.

A company will determine when to issue its annual sustainability-related financial disclosures as follows.


Despite the relief, sustainability-related financial disclosures need to be authorised by the same bodies or individuals that authorise the financial statements.

The standards include other reliefs for the first year of reporting, including a climate-first option, an exemption from presenting comparative information3 and support to provide greenhouse gas emissions disclosures4.

What’s the impact?

The effective date of 1 January 2024 aims to recognise the urgent need for a global baseline, but adoption of the standards is dependent on local jurisdictions.

For companies that are in the scope of multiple frameworks, aligning the effective date with other jurisdictional sustainability frameworks is key.

After the first year, companies will need to provide sustainability-related financial disclosures at the same time as the financial statements. This will require careful planning – probably over multiple reporting cycles – and adequate resources, systems and processes. Companies may need to use estimates, requiring significant judgement.

Actions for management

  • Get ready for the possibility of reporting sustainability-related financial disclosures for 2024 year-ends.
  • Design your reporting systems, processes and controls to enable reporting of sustainability-related financial information at the same time as the financial statements.
  • Create a roadmap and identify any capacity constraints.
  • Engage in discussions on the adoption timeline and the applicable transition reliefs in your jurisdiction(s).

1 IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures (together 'the standards').

2 EU requirement in the Corporate Sustainability Reporting Directive (CSRD).

3 IFRS S1 provides an additional year before related comparative information is required. For example, in the first year of reporting, no comparatives are required. In the second year of reporting, a company choosing to use the climate-first relief and the relief from disclosing Scope 3 greenhouse gas emissions would disclose comparatives for climate-related disclosures (excluding Scope 3 emissions), but not for broader sustainability-related financial disclosures.

4 IFRS S2 provides a relief for the first year of application from disclosing Scope 3 greenhouse gas emissions, and from using the Greenhouse Gas Protocol, where companies have historically used a different measurement method. See further details on reliefs applicable to greenhouse gas disclosures.

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