Roadmap development tool for adopting ISSB Standards
The objective of the roadmap development tool is to help jurisdictions navigate the main considerations and decision points that are likely to arise as they develop a detailed project plan for adopting or otherwise using ISSB Standards—often referred to as a roadmap.
The roadmap development tool and the accompanying reference roadmap templates will support regulators and other relevant authorities as they work through the policy considerations and key steps of:
- planning and designing their roadmap for the adoption or other use of ISSB Standards; and
- assessing the implications of alternative decisions and approaches.
Advantages of using an adoption roadmap
Developing and communicating a detailed jurisdictional roadmap can be a valuable step in a jurisdiction’s journey to adopt or otherwise use ISSB Standards. Developing a roadmap involves setting clear objectives and identifying crucial milestones in the process. These objectives and milestones allow a jurisdiction to assign responsibilities, measure its progress towards adoption or other use of ISSB Standards and ensure that all responsible parties are held accountable for this progress. Developing a roadmap, and discussing it with stakeholders, can also help a jurisdiction to identify dependencies in the sustainability reporting ecosystem, and the resources and expertise necessary for successful adoption. Furthermore, by publishing a roadmap, a jurisdiction can enable entities potentially within the scope of planned requirements to begin to plan and design their implementation programmes, enabling them to make progress while the regulatory framework is being developed.
Roadmap Development Tool
The roadmap development tool is designed to help regulators and other relevant authorities work through the process systematically to promote cost‑effective disclosures that provide comparable sustainability‑related financial information for investors.
The tool is also designed to reflect that jurisdictions’ legal and regulatory frameworks vary, which along with capacity, skills, data and institutional factors, might lead to differences in jurisdictional approaches. The tool—used in combination with a set of roadmap templates—will therefore assist regulators and other relevant authorities in assessing:
- what the implications of their decisions will be;
- how well their jurisdictional approach will achieve their stated objectives;
- how well their jurisdictional approach will be understood by capital market participants and other stakeholders; and
- how the IFRS Foundation will describe their jurisdictional approach in an IFRS Foundation jurisdictional profile.
A roadmap will need to capture a jurisdiction’s decisions in respect of the how, who, what and when questions that arise as it develops its jurisdictional approach. The 11 features of jurisdictional approaches, introduced in the Jurisdictional Guide, span these four decision areas—acknowledging interdependencies between them. In the roadmap development tool, the 11 features of jurisdictional approaches and the decision points relevant to them are grouped under four decision areas:
- Regulatory process (how?)—establishing the legal or regulatory conditions and process for adopting or otherwise using ISSB Standards, including the mechanisms for coordination among the relevant authorities and stakeholders within the jurisdiction;
- Reporting entities (who?)—determining which entities will be subject to the sustainability-related disclosure requirements in order to achieve the jurisdiction’s objectives;
- Requirements (what?)—specifying the content of sustainability-related disclosures, and considering the implications of any additional jurisdiction-specific requirements, and the location and timing of reporting; and
- Readiness (when?)—assessing market readiness and setting a timeline for the introduction of the sustainability-related disclosure requirements and considering whether it is necessary to scale and phase in these requirements.
A jurisdiction’s decisions in respect of all 11 features will determine its jurisdictional approach. Section 3.4 of the Jurisdictional Guide sets out the seven potential jurisdictional approaches to the adoption or other use of ISSB Standards*. According to the Jurisdictional Guide, fully adopting ISSB Standards, including developing requirements (or standards) designed to deliver functionally aligned outcomes* is the most effective jurisdictional strategy to deliver globally comparable information for capital markets.
Committing to adoption or other use of ISSB Standards
A jurisdiction issues a public policy statement of intent to adopt or otherwise use ISSB Standards before the end of 2029, along with a credible roadmap
Partially incorporating ISSB Standards
A jurisdiction introduces sustainability-related disclosure requirements that include content from the ISSB Standards, but with modifications such that the requirements are not designed to deliver functionally aligned outcomes to those resulting from the application of IFRS S1 and IFRS S2
Permitting the use of ISSB Standards
A jurisdiction introduces regulations that permit and encourage the use of ISSB Standards or sustainability-related disclosure requirements with functionally aligned outcomes
Adopting ISSB Standards with extended transition
A jurisdiction phases in the introduction of ISSB Standards or sustainability-related disclosure requirements designed to deliver functionally aligned outcomes in its regulatory framework, with an extension of transition standard reliefs (as defined in the Jurisdiction Guide) that will be removed or will expire within no more than three to five years; or introduces transition relief from any reference to SASB Standards in the application of IFRS S1 that will be in place no longer than five years
Adopting ISSB Standards with limited transition
A jurisdiction phases in the introduction of ISSB Standards or sustainability-related disclosure requirements designed to deliver functionally aligned outcomes in its regulatory framework, with an extension of transition standard reliefs (as defined in the Jurisdiction Guide), that will be removed or will expire within no more than three to five years; or introduces transition relief from any reference to SASB Standards in the application of IFRS S1 that will be in place no longer than five years
Adopting climate requirements in ISSB Standards
A jurisdiction adopts IFRS S2 and the climate-relevant portions of IFRS S1, or local climate-related disclosure requirements designed to deliver functionally aligned outcomes—that is, outcomes aligned with those resulting from application of IFRS S2 and the climate-relevant portions of IFRS S1
Fully adopting ISSB Standards
A jurisdiction introduces a legislative or regulatory requirement for all or most domestic publicly accountable entities to apply ISSB Standards, or requirements designed to deliver functionally aligned outcomes
*In describing jurisdictional approaches and progress towards adoption or other use of ISSB Standards, the Jurisdictional Guide provides that consideration will be made to jurisdictions with regards to: adoption or other use of ISSB Standards; or introduction of other sustainability-related disclosure requirements.
*Local sustainability-related disclosure requirements (or standards) designed to deliver functionally aligned outcomes to those resulting from the application of IFRS S1 and IFRS S2 provide the same information and outcomes on sustainability-related risks and opportunities that is useful to primary users of general purpose financial reports. Sustainability-related disclosure requirements designed to deliver functionally aligned outcomes need to meet the criteria articulated in the Conceptual Foundations, Core Content and General Requirements in paragraphs 10–72 of IFRS S1, among other things. Please also see functionally aligned outcomes.
| Decision area | Feature | Relevant aspect of feature |
|---|---|---|
| Regulatory process (how?) | Regulatory or legal standing | Whether there is a legislative or regulatory requirement to apply ISSB Standards or to otherwise introduce sustainability-related disclosure requirements |
| Reporting entities (who?) | Targeted entities—publicly accountable entities | The extent to which requirements are applicable to all or most domestic publicly accountable entities |
| Publicly accountable entities—market segments | Where applicable, the extent to which requirements are applied to the first (prime, premium or senior) and second (standard) market tiers of publicly accountable entities | |
| Reporting entity | Whether the sustainability-related disclosure requirements are for the same reporting entity as for the related financial statements | |
| Requirements (what?) | Degree of alignment | The extent to which ISSB Standards are fully incorporated into regulatory frameworks or, if not fully incorporated, the degree of alignment of local standards (or requirements) with ISSB Standards |
| Jurisdictional modifications | The extent and nature of any jurisdictional modifications | |
| Additional disclosure requirements | Whether any additional disclosures are required and, if so, whether it is required that they do not obscure information disclosed in accordance with ISSB Standards | |
| Placement of disclosures (also affecting timing) | Whether disclosures are required to be included in general purpose financial reports and provided at the same time as the related financial statements | |
| Dual reporting | Whether there are any requirements for dual reporting (in accordance with local requirements and ISSB Standards) | |
| Readiness (when?) | Effective date (when the requirements become effective in the jurisdiction) | The extent to which jurisdictional requirements refer to currently effective ISSB Standards (noting that IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures provide transition standard reliefs) |
| Transition reliefs | The extent and nature of phasing in of specific requirements in ISSB Standards and extensions of transition standard reliefs and therefore when reporting requirements are applicable |
The IFRS Foundation will publish jurisdictional profiles only when a jurisdiction’s approach to sustainability reporting is finalised and no longer subject to consultation.
When relevant, a jurisdictional profile will include information about the most up-to-date, or current, status of a jurisdiction’s sustainability-related disclosure requirements and the stated jurisdictional target that the jurisdiction aims to achieve for sustainability-related disclosures. For example, a jurisdiction may permit the use of ISSB Standards during the period prior to mandating their use by all or most publicly accountable entities. Until the period of mandatory use, a jurisdictional profile would describe the most up-to-date or current status as ‘permitting the use of ISSB Standards’ and the stated jurisdictional target as ‘fully adopting ISSB Standards’.
The roadmap tool is organised into the four decision areas introduced earlier—regulatory process, reporting entities, requirements and readiness. The content in each decision area is organised into:
- guidance—each decision area begins with an overview of the issues that regulators or other relevant authorities need to consider in developing a jurisdictional roadmap, relevant to the features associated with that decision area. Each overview summarises and elaborates on the relevant content in the Jurisdictional Guide, drawing on observed practice from roadmaps, consultations and relevant regulatory documents published by jurisdictions that have already embarked on the process.
- decisions and outcomes – sets out more detailed key considerations and decision points relevant to the features associated with the relevant decision area, along with a checklist of related questions for jurisdictions to work through and a summary of the potential outcomes based on the various decision points. As a guide, the decisions and outcomes in the roadmap development tool identify in green the outcomes for each feature that may correspond to a ‘fully adopting’ strategy (as described in the jurisdictional profile for the jurisdiction). Orange is used to indicate outcomes that may correspond to other strategies for the adoption or other use of ISSB Standards. The roadmap templates illustrate the interaction between a jurisdiction's decisions and their corresponding outcomes, and how these may be understood by stakeholders and described in the IFRS Foundation’s jurisdictional profiles. Jurisdictional profiles will indicate both the current status of a jurisdiction's disclosure requirements and the stated jurisdictional target.
Finally, the roadmap development tool addresses further considerations relevant to jurisdictions as they determine key aspects of a regulatory framework for sustainability-related disclosures.
