At COP26, the IFRS Foundation announced the establishment of the International Sustainability Standards Board (ISSB).
The announcement was in response to demand from market participants, and requests from the G7 and G20, to assist in addressing the complex and fragmented sustainability disclosure landscape.
In June 2023, the ISSB issued its inaugural Standards—IFRS S1 and IFRS S2—creating a comprehensive global baseline of sustainability disclosures for capital markets.
In December 2023, close to 400 organisations from 64 jurisdictions committed to advancing the adoption or use of the ISSB’s climate-related reporting at a global level.
What do we mean by ‘global baseline’?
The ISSB is focused on developing standards that can provide a common language for sustainability information, to enable comparable and consistent sustainability disclosures across global capital markets.
The ISSB is working with jurisdictions around the world, as well as market participants, to deliver this.
Through this global shared endeavour, IFRS Sustainability Disclosure Standards can provide the foundations for globally applicable disclosure requirements, thereby establishing a consistent and comprehensive global baseline.
This includes working closely with the International Organization of Securities Commissions (IOSCO) following its decision to endorse IFRS Sustainability Disclosure Standards.
The ISSB’s global baseline has been developed to provide the information that is material to investors globally. However, jurisdictions can require local market participants to disclose further information, by adding their own additional ‘building blocks’ to these global foundations, tailored to the information needs that jurisdiction deems necessary. Additional disclosures can be required as long as that information is presented in a way that does not obscure the global baseline.
These local building blocks could be focused on disclosures that go beyond the remit of the IFRS Foundation, which is to meet the information needs of investors and capital markets. Or it could include jurisdiction-specific information relevant to investors.
Who is involved?
The ISSB is working with local jurisdictions globally. The work of the ISSB has the support of the G20, along with Finance Ministers and Central Bank Governors from more than 40 jurisdictions on six continents who officially welcomed the IFRS Foundation’s goal to create a comprehensive global baseline of sustainability disclosures focused on meeting the needs of capital markets.
The ISSB created a Jurisdictional Working Group to establish dialogue for enhanced compatibility between the ISSB Standards and ongoing jurisdictional initiatives on sustainability disclosures.
Furthermore, the ISSB established the Sustainability Standards Advisory Forum, a group of nominated members from jurisdictional and regional authorities involved in sustainability-related reporting. Members constructively contribute towards the achievement of the ISSB’s goal of developing Standards that provide a comprehensive global baseline, ensuring two-way engagement between the ISSB and jurisdictions.
