The International Sustainability Standards Board (ISSB) is shaping the future of sustainability-related financial disclosures by establishing a consistent global framework for ESG reporting. Created by the IFRS Foundation in 2021, the ISSB is addressing the longstanding need for a unified standard that enables companies to report sustainability risks and opportunities with transparency, consistency, and comparability—across industries and markets.

By consolidating existing frameworks and responding to regulatory, investor, and capital market demands, the ISSB is helping organizations embed ESG performance into core financial decision-making.

The ISSB’s Mandate and Global Role

The ISSB was launched at COP26 and builds on the legacies of the Value Reporting Foundation, SASB, and other established initiatives. Its primary mission is to reduce fragmentation in the sustainability reporting landscape by delivering a global baseline for sustainability-related financial disclosures.

Supported by leading global institutions—including the G20, IOSCO, and the Financial Stability Board—the ISSB collaborates closely with regulators, investors, and businesses to ensure its standards meet the needs of modern financial markets.

Key Standards: IFRS S1 and IFRS S2

IFRS S1 – General Sustainability Disclosures

IFRS S1 provides a comprehensive framework for disclosing material sustainability-related risks and opportunities. Key features include:

• Governance and oversight of sustainability risks

• Risk management processes related to ESG factors

• Financial materiality, aligned with investor needs

• Integration of SASB standards and Integrated Reporting principles for sector-relevant reporting

IFRS S1 is designed to be industry-agnostic, enabling consistent disclosures across sectors while maintaining relevance to individual business models and geographies.

IFRS S2 – Climate-Related Disclosures

Built on the TCFD framework, IFRS S2 focuses specifically on climate-related risks and opportunities. Required disclosures include:

• Scope 1, 2, and 3 greenhouse gas emissions

• Governance of climate-related issues

• Strategic planning and risk management around climate impacts

• Scenario analysis and financial resilience assessments

• Internal carbon pricing mechanisms and climate-linked executive remuneration

Together, IFRS S1 and S2 aim to integrate sustainability-related financial data into mainstream reporting, supporting capital markets in assessing long-term viability and ESG exposure.

Mandatory Metrics and Targets

Companies adopting ISSB standards must disclose key sustainability metrics, including:

• GHG emissions across all scopes

• Emissions intensity relative to financial and operational performance

• Sustainability-related risk exposures (physical and transition risks)

• Investment in climate action and low-carbon technologies

• Internal carbon pricing and its influence on decision-making

• Climate-related targets and progress, including:

  • Baselines and timelines (interim and long-term)

  • Performance metrics

  • Alignment with international frameworks (e.g., Paris Agreement)

  • Use of offsets and third-party validation

Interoperability with Other Frameworks

The ISSB is designed to complement and align with existing global frameworks, supporting convergence rather than redundancy. Notable areas of alignment include:

• GRI: For broader sustainability and impact reporting

• CSRD/ESRS: For compliance within the EU, particularly in recognizing double materiality

• SASB: For sector-specific performance disclosures

• IFRS Taxonomy: To enable digital and machine-readable reporting

This interoperability ensures companies can meet multiple disclosure requirements with a harmonized set of data and processes.

Global Implications and Adoption Momentum

Regulators and standard-setters across jurisdictions are signaling support for the ISSB:

• The EU’s CSRD incorporates ISSB elements while retaining double materiality

• The UK is moving toward integration of ISSB standards into company law and FCA requirements

• Canada, Australia, Singapore, and others are aligning national frameworks with ISSB disclosures

As jurisdictions build or revise climate and ESG regulations, ISSB standards are becoming the default reference point for investor-focused sustainability reporting.

How Companies Can Prepare

To prepare for adoption or alignment with ISSB standards, companies should:

• Conduct a gap analysis of current sustainability reporting practices against IFRS S1 and S2

• Enhance data governance and ensure ESG metrics are integrated into enterprise risk management

• Establish internal controls and audit-readiness for ESG disclosures

• Align board-level oversight with sustainability-related financial risks

• Engage cross-functional teams (finance, risk, legal, sustainability) to drive a unified reporting approach

Technology’s Role in Supporting ISSB Compliance

As ISSB disclosures require structured and decision-useful data, technology will play a central role in enabling compliance and enhancing data quality. ESG and sustainability software can support organizations by:

• Automating data collection across operations and value chains

• Centralizing ESG metrics aligned with IFRS S1 and S2 requirements

• Supporting scenario analysis and climate risk modeling

• Enhancing auditability and assurance readiness

• Improving stakeholder confidence through consistent, high-integrity reporting

A Turning Point in ESG Reporting

The ISSB represents a transformative shift in global ESG disclosure. For ESG leaders, aligning with ISSB standards is not only about compliance—it’s a strategic opportunity to embed sustainability into the core of business value creation.

By preparing now, companies can stay ahead of regulatory developments, meet rising investor expectations, and position themselves as credible, forward-looking leaders in a rapidly evolving sustainability landscape.