The ISSB sits alongside the existing International Accounting Standards Board (IASB), with both standard-setting boards operating under the oversight of the IFRS Foundation. Although the ISSB and IASB are separate and independent boards, they work alongside each other to enhance interconnectedness between financial reporting and sustainability reporting.

The formation of the ISSB resulted in the consolidation of two pre-existing sustainability frameworks, namely The Climate Disclosure Standards Board and The Value Reporting Foundation’s Integrated Reporting Framework. Consequently, the Value Reporting Foundation’s SASB Standards (a set of 77 industry-based standards) were brought under the oversight of the ISSB and are now being used in the development process of the ISSB’s standards.

Although the ISSB is building on the established work of these pre-existing frameworks, it is the Task Force on Climate-related Financial Disclosures (TCFD) framework that forms the bedrock of the first two standards issued by the ISSB.

The ISSB has focused its initial efforts on general disclosure requirements and climate-related reporting, issuing its first two IFRS Sustainability Disclosure Standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, in June 2023.

IFRS S1 sets out the general reporting requirements. It requires an entity to disclose material information about the sustainability-related risks and opportunities to which it is exposed, including information about the entity’s governance, strategy, risk management, and metrics and targets. The standard permits reference to other standards and frameworks in the absence of topic specific IFRS Sustainability Disclosure Standards.

• Find out more about IFRS S1’s disclosure requirements

IFRS S2 requires an entity to disclose certain information about its governance, strategy, risk management and metrics and targets in respect of climate-related risks and opportunities. This includes information about physical risks (eg, extreme weather events) as well as transition risks (eg, changes in customer behaviour). An in-scope entity will also be required to disclose information on its transition planning, climate resilience as well as its scope 1, 2 and 3 emissions.

• Find out more about IFRS S2’s disclosure requirements

The UK Government has repeatedly indicated its intention for UK companies to adopt the ISSB’s IFRS Sustainability Disclosure Standards and aims to make UK-endorsed ISSB standards available for public consultation in Q1 2025. These will be known as UK Sustainability Reporting Standards (UK SRS). UK SRS will be based on the IFRS Sustainability Disclosure Standards and will only divert from them if necessary for UK specific matters. Following the consultation, the UK Secretary of State for Business and Trade will make a final  endorsement decision.

• Find out more about IFRS S1 and IFRS S2 in the UK

The ISSB has initially focused its efforts on general disclosure requirements and climate-related reporting. Over time, it will work towards meeting the information needs of investors on other specific environmental, social and governance (ESG) matters. In May 2023, the ISSB published its first Request for Information, Consultation on Agenda Priorities, to ask for feedback on its priorities for 2024-2026. In its Feedback Statement to this Agenda Consultation, the ISSB noted the following regarding its strategic priorities:

• A high level of focus will be given to supporting implementation of IFRS S1 and IFRS S2;
• A slightly lower level of focus will be given to both enhancing the Sustainability Accounting Standards Board (SASB) standards and beginning new research projects (see below); and
• Connectivity with the IASB, interoperability with other sustainability-related standards and frameworks, and stakeholder engagement will be integral to all the ISSB’s work.

The ISSB decided to add to its work plan, research projects on risks and opportunities associated with:  

• biodiversity, ecosystems and ecosystem services; and
• human capital.

 Projects relating to human rights and integration in reporting, which had been considered as part of the Agenda Consultation, will not be added to the ISSB’s work plan at this time.

Global alignment with sustainability reporting initiatives from other jurisdictions is a priority for the ISSB. In April 2022, the ISSB established a working group of jurisdictional representatives to open a dialogue for enhanced compatibility between the work of the ISSB and other standard-setters.

Meeting summaries for the Jurisdictional Working Group are available on the IFRS Foundation’s website.

In May 2024, the IFRS Foundation and European Financial Reporting Advisory Group (EFRAG) published ESRS-ISSB Standards Interoperability Guidance, describing the alignment achieved between European Sustainability Reporting Standards (ESRS) and IFRS Sustainability Disclosure Standards, and how an entity can enable compliance with both sets of standards.