ISSB Standards

The International Sustainability Standards Board was created in 2021 by the IFRS Foundation, which also oversees International Financial Reporting Standards for accounting. It aimed to consolidate the many existing sustainability reporting frameworks into a single global baseline.

In June 2023, the ISSB issued its first two standards. IFRS S1 sets general requirements for disclosing sustainability-related financial information. IFRS S2 sets specific requirements for climate-related disclosures, including governance, strategy, risk management and metrics, including Scope 1, 2 and 3 greenhouse gas emissions. These standards build on the recommendations of the Task Force on Climate-related Financial Disclosures.

For example, a company applying IFRS S2 would explain how climate change could affect its business, its strategy for managing climate risks, and its emissions and targets.

The standards focus on information that is material to investors, a concept known as single or financial materiality. Many jurisdictions, including the United Kingdom, Australia, Canada, Japan, Singapore and others, have adopted or are adopting the standards, in some cases with modifications or phased introduction.