International Sustainability Standards Board

ISSB Establishment

The IFRS Foundation announced the establishment of the International Sustainability Standards Board (ISSB) at COP26 in Glasgow on 3 November 2021. The ISSB was created to develop a full global baseline of sustainability disclosure standards meeting investor information needs. The board consolidates previous initiatives including the Value Reporting Foundation (encompassing SASB Standards and the Integrated Reporting Framework) and the Climate Disclosure Standards Board (CDSB).

The creation of the ISSB represents a significant step toward global sustainability reporting standardization. The IFRS Foundation's decades of experience developing globally accepted financial reporting standards positions the ISSB to achieve similar adoption for sustainability disclosures. The board's initial work program focus ond climate-related disclosures while establishing a general sustainability disclosure standard providing the foundation for afterpic-specific standards.

The ISSB operates with headquarters in Frankfurt and offices in Montreal and other locations to ensure global representation. Technical staff support standard-setting activities while maintaining close coordination with the International Accounting Standards Board (IASB) on matters affecting both financial and sustainability reporting. This connected standard-setting model aims to ensure coherence between financial statements and sustainability disclosures in integrated reports.

Strategic Rationale and Investor Focus

Investors now require comparable, reliable sustainability information to inform investment decisions and assess enterprise value over time. The spread of voluntary frameworks created a fragmented reporting environment hindering comparability and increasing reporting burden for companies. The ISSB aims to consolidate this environment by developing a global baseline that jurisdictions can adopt directly or build upon according to their specific public policy needs.

The board's standards focus on enterprise value, addressing sustainability-related risks and opportunities that could reasonably be expected to affect an entity's cash flows, access to finance, or cost of capital over the short, medium, and long term. This investor-focused approach follows the IFRS Foundation's established mission and differentiates the ISSB from standards addressing broader stakeholder interests or impact-oriented disclosures.

The ISSB built upon existing market-led initiatives to accelerate development timelines and use established practice. The consolidation of SASB's industry-specific metrics, CDSB's climate disclosure framework, and elements of the TCFD recommendations into the ISSB's standards provides continuity for organizations already reporting under these frameworks while establishing a path toward globally consistent requirements.

Standards Development Process

ISSB standards follow the same rigorous due process as IFRS Accounting Standards, including public consultation on exposure drafts, deliberation on stakeholder feedback, impact assessment, and formal balloting by board members. This process helps ensure standards are practical, proportionate, and responsive to stakeholder concerns while maintaining the technical quality expected of global standards.

The ISSB's inaugural standards—IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures)—were issued in June 2023 after extensive consultation. These standards require companies to disclose material information about sustainability-related risks and opportunities, with climate disclosures following the four-pillar framework established by the TCFD (governance, strategy, risk management, and metrics and targets).

Ongoing standard-setting activities address additional topics including biodiversity, human capital, and human rights disclosures. The ISSB collaborates with the Global Reporting Initiative (GRI) to ensure interoperability with impact-oriented standards, enabling companies to satisfy both investor-focused and multi-stakeholder reporting needs through coordinated disclosures. This collaboration reduces duplication and supports efficient reporting.

Jurisdictional Adoption

Multiple jurisdictions have announced intentions to adopt or reference ISSB standards within their regulatory frameworks. The UK, Singapore, Australia, Canada, Nigeria, and others have showed plans for mandatory or voluntary adoption. The International Organization of Securities Commissions (IOSCO) endorsed the ISSB standards, encouraging member jurisdictions to consider adoption within their regulatory frameworks.

The European Union has developed its own European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD), with interoperability mechanisms allowing companies to satisfy ISSB requirements through ESRS compliance for many disclosures. Understanding jurisdictional variations helps multinational organizations design efficient compliance programs satisfying multiple requirements without duplicative effort.

Emerging markets and developing economies are also evaluating ISSB adoption, recognizing that globally consistent sustainability disclosures support access to international capital markets and foreign investment. The ISSB provides capacity-building resources and setup support to help jurisdictions with varying levels of reporting infrastructure prepare for adoption.

Industry-Specific Considerations

The ISSB's incorporation of SASB's industry-specific metrics provides tailored disclosure requirements for 77 industries across 11 sectors. If you are affected, identify applicable industry standards and assess data availability for required metrics. Industry classification may require judgment where organizations operate across multiple sectors or where business models do not align precisely with SASB definitions.

Scenario analysis requirements for climate-related disclosures pose particular setup challenges, requiring organizations to develop or adapt climate scenarios, assess physical and transition risks, and quantify potential financial impacts. Cross-functional collaboration between sustainability, finance, risk, and strategy teams supports full scenario development.

Wrapping up

The establishment of the ISSB marks a key moment in the evolution of corporate reporting, positioning sustainability disclosures alongside financial information as essential components of investor decision-making. Organizations that early prepare for ISSB adoption will be better positioned to meet stakeholder expectations, access capital markets, and show commitment to sustainable business practices.

Stakeholder engagement through investor relations, annual reports, and sustainability communications helps organizations understand information needs and build credibility with the investment community.

Technology investments in data management platforms help efficient collection, validation, and reporting of sustainability metrics across global operations.

Continuous improvement of reporting processes ensures organizations remain prepared for evolving disclosure expectations.

Global Baseline

ISSB establishes global baseline for sustainability disclosures building on TCFD. Prepare for mandatory adoption as jurisdictions incorporate standards.

Implementation

Enhance data systems for sustainability metrics. Assurance requires documented processes.

Reporting Timeline Considerations

Organizations should align ISSB implementation with financial reporting calendars. Climate scenario analysis requires lead time for modeling and validation. Early engagement with auditors establishes expectations for assurance scope and methodology.

Data Infrastructure

Sustainability data collection requires investment in monitoring systems, supplier engagement processes, and calculation methodologies. Automation reduces manual effort and improves data quality for recurring disclosure requirements.

Integration with Governance

Board oversight of sustainability reporting requires governance structures and expertise. Audit committee responsibilities extend to sustainability assurance oversight.

You may also find useful

Hand-picked articles on adjacent topics.

Governance · Credibility 92/100 · December 1, 2021

Governance Oversight Retrospective — Corporate governance

Global regulators reshaped governance between 2020 and 2021—from SEC narrative disclosures and EU data sharing rules to ISSB sustainability standards—requiring boards to refresh oversight controls, talent mandates, and…

Governance · Credibility 73/100 · September 17, 2021

Governance — Australia

Australia introduced Governance Standard 6 for registered charities, requiring documented accountability systems to maintain public trust and manage serious wrongdoing risks.

Governance · Credibility 90/100 · September 6, 2021

Governance — SASAC compliance

China's SASAC released compliance guidelines for state-owned enterprises. SOEs now need designated compliance officers, risk assessment programs, and whistleblower channels. This affects any company working with Chinese…

Governance · Credibility 73/100 · January 5, 2022

China and Corporate governance

China’s updated CSRC Corporate Governance Code took effect 5 January 2022, compelling listed companies to sharpen board oversight, internal controls, and supplier transparency to meet Mainland capital market…

Governance · Credibility 73/100 · January 25, 2022

UK Online Safety Bill: Duty of Care Framework for Digital Platforms

The UK published its Online Safety Bill, creating a duty of care for platforms to protect users from illegal and harmful content. It is ambitious and controversial—critics say it could undermine encryption.

Continue in the Governance pillar

Return to the hub for curated research and deep-dive guides.

Visit pillar hub

Latest guides

• Board Oversight Governance Blueprint

  Unify Basel Committee, PRA, SEC, and ISSB oversight mandates into an auditable board governance operating model with data lineage, assurance cadences, and regulatory source packs.

• Third-Party Governance Control Blueprint

  Deliver OCC, Federal Reserve, PRA, EBA, DORA, MAS, and OSFI third-party governance requirements through board reporting, lifecycle controls, and resilience evidence.

• Public-Sector Governance Alignment Playbook

  Align OMB Circular A-123, GAO Green Book, OMB M-24-10 AI guidance, EU public sector directives, and UK Orange Book with digital accountability, risk management, and service…

Coverage intelligence

Published

November 3, 2021

Coverage pillar

Governance

Source credibility

91/100 — high confidence

Topics

International Sustainability Standards Board · IFRS sustainability disclosure standards · Global baseline reporting alignment · Climate risk governance · Sustainability data controls · Investor-focused transparency

Sources cited

3 sources (ifrs.org, fsb-tcfd.org)

Reading time

6 min

Documentation

1. IFRS Foundation ISSB — ifrs.org
2. ISSB Standards — ifrs.org
3. TCFD Recommendations — fsb-tcfd.org