Governance Briefing — November 3, 2021
The IFRS Foundation announced the International Sustainability Standards Board (ISSB) on November 3, 2021, consolidating the VRF and CDSB to deliver a global baseline of investor-focused sustainability disclosure standards.
Executive briefing: On 3 November 2021, during COP26, the IFRS Foundation Trustees unveiled the International Sustainability Standards Board (ISSB) to develop globally consistent sustainability reporting for capital markets. The Trustees confirmed plans to consolidate the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF) into the Foundation, released prototype climate and general sustainability disclosure requirements, and committed to joint work with IOSCO to support adoption.
What changed
- Single global standard setter. The ISSB will sit alongside the International Accounting Standards Board (IASB) under the IFRS Foundation, providing investors with comparable sustainability information.
- Prototype disclosure requirements. The Foundation published prototype general requirements and climate standards as a starting point for consultation, signalling board governance, risk management, and metrics expectations.
- Consolidation of frameworks. CDSB and VRF (SASB Standards and Integrated Reporting Framework) agreed to merge into the IFRS Foundation in 2022, reducing fragmentation for preparers.
Implications for operators
- Public sector issuers. Sovereign wealth funds and state-owned enterprises relying on IFRS will need to monitor ISSB adoption pathways and integrate sustainability oversight into board governance.
- Financial institutions. Asset managers and banks gain a clearer baseline for stewardship expectations and portfolio reporting, reinforcing governance of financed emissions and transition plans.
- Technology and global multinationals. ISSB prototypes foreshadow cross-border reporting convergence, prompting multinational boards to harmonise ESG data governance and assurance.
Action checklist
- Map existing SASB, CDSB, or Integrated Reporting controls to the ISSB prototype requirements.
- Brief audit committees on consolidation timelines and assurance implications for sustainability information.
- Engage investor-relations teams on how ISSB standards will influence global capital-market disclosures.
Sources
- IFRS Foundation announcement of the ISSB
- COP26 announcement presentation on the ISSB and prototype disclosures
Zeph Tech guides finance and governance teams through ISSB readiness assessments, harmonising SASB, TCFD, and Integrated Reporting controls.