International Sustainability Standards Board (ISSB)
From 1 January 2024, under the ISSB's IFRS S1 and S2 standards, companies will need to report on sustainability risks, including governance, strategy, and risk management related to climate change.
Why the ISSB?
The International Sustainability Standards Board (ISSB), in conjunction with its sister board, the International Accounting Standards Board (IASB), jointly oversees the International Financial Reporting Standards (IFRS) framework. The ISSB plays a pivotal role within the IFRS, particularly in mandating the disclosure of Scope 3 greenhouse gas emissions. Two key standards, IFRS S1 and IFRS S2, are slated for implementation in January 2024.
IFRS S1: General Requirements for Disclosure of Sustainability related Financial Information requires companies to disclose material information on all sustainability-related risks and opportunities that could reasonably be expected to affect their prospects. The SASB Standards are an important source of guidance for companies applying IFRS S1.
IFRS S2: Climate-related Disclosures sets out the requirements for climate-related disclosures.
In a significant move to enhance transparency and accessibility, the ISSB has also developed the IFRS Sustainability Disclosure Taxonomy. This innovative tool is designed to enable seamless digital access to sustainability-related financial information, catering to the needs of users of general-purpose financial reports.