The International Sustainability Standards Board (ISSB) was created to set a global baseline for companies sharing sustainability-related financial disclosures. Today, ISSB remains focused on the information investors and financial markets need to make investment decisions, but it’s not yet as widespread as we’re expecting it. But the way you use the ISSB largely depends on where you’re based and what your local requirements are.
What is the International Sustainability Standards Board (ISSB)?
The International Sustainability Standards Board is a group the International Financial Reporting Standards Foundation (IFRS) developed to help companies share and compare their sustainability efforts. These standards gave companies a way of disclosing consistent, comparable, and reliable sustainability information to investors and other stakeholders according to predefined criteria.
What are the ISSB Standards?
The ISSB Standards work like a framework that guides your company when disclosing sustainability-related financial information. They aim to communicate how sustainability risks and opportunities affect your business. Plus, they can help you keep up with increasing requests for transparency in ESG.
There are two ISSB Standards to consider depending on what type of sustainability-related information you’re required to disclose:
- IFRS S1: Acts as a general framework you can use to disclose material sustainability-related risks and opportunities.
- IFRS S2: Strictly focuses on climate-related risks and opportunities, as per the TCFD recommendations.
What are the main benefits of following the ISSB Standards?
The main benefits of adhering to ISSB Standards include:
- An easier way for companies to compare their disclosures across different industries and geographies, ensuring they’re consistent and appealing to investors.
- A tool for building trust by giving stakeholders clear insights into how sustainability issues are managed within a company.
- A solution to a lack of transparency in assessing sustainability risks and opportunities.
- An error-proof method to stay compliant and keep up with new regulations across all global jurisdictions.
- An insider’s look at just how your own company performs, as well as what your sustainability performance, risks, and opportunities are.
- A push forward as early adopters of ISSB Standards can position themselves as sustainability leaders.
How does the ISSB work with other local standards?
Most countries have started aligning their local standards with ISSB principles. 71% of corporate leaders in 2024 view ESG investment as a competitive advantage, up from 60% in 2023.
In Hong Kong, for example, the new voluntary code of conduct for ESG ratings and data providers emphasizes transparency and aligns with ISSB principles. The proposed sustainability disclosure standards aligned with ISSB Standards will be effective as of August 2025.
Similarly, countries like Singapore, Japan, Malaysia, and South Korea have also introduced similar voluntary frameworks. Singapore updated climate disclosure rules requiring Scope 1 and 2 emissions reporting by 2025 and phased Scope 3 disclosures starting in 2026. Bursa Malaysia proposed amendments to its sustainability reporting standards as large listed companies must begin limited climate-related disclosures by December 31, 2024.
Australia launched a consultation for a voluntary market to enhance biodiversity conservation, with rules including biodiversity project registration and certificates. Through mandatory climate reporting, they also passed a bill enforcing climate disclosures for businesses based on revenue thresholds, starting January 2025.
In contrast, the EU is currently struggling with delays in implementing the European Deforestation Regulation (EUDR). Infringement notices to 17 member states signal ongoing challenges in harmonizing ISSB-aligned sustainability reporting across jurisdictions.
Collaboration between the World Bank and IFRS Foundation aims to support ISSB adoption in emerging markets and developing economies, reflecting a global push for unified sustainability reporting.
Read more on where the world currently stands in terms of ISSB adoption.
How to apply the ISSB Standards?
Applying the ISSB Standards effectively requires a systematic approach.
Conduct a gap analysis
Once you’re familiar with your respective jurisdictional requirements, consider running a gap analysis.
Look at what your present reporting looks like and compare it against ISSB requirements to identify gaps. This includes reviewing existing data collection systems and evaluating alignment with sustainability-related risks and opportunities beyond climate disclosures.
Prepare your stakeholders and invest in data aggregation tools
You can only start applying the ISSB Standard once you’ve got your stakeholders prepared and ready to collaborate throughout the process. One idea is to start investing in better tools for data aggregation and reporting. You’ll use these platforms to run smoother processes for integrating sustainability risks into governance and strategy.
Stay up-to-date with evolving regulations
While the ISSB Standards aren’t yet the most widespread framework, more jurisdictions are integrating them into their regulatory frameworks. As of 2024, 30 jurisdictions, representing 57% of global GDP, have adopted or are introducing ISSB Standards.
That’s why the next most sensible thing is to make sure you can keep up with evolving regulations in your regions to ensure compliance.
Start early and gain a competitive advantage
Starting early is what matters most here. The sooner you get accustomed to using these standards, the higher your chance of staying competitive and also gaining trust from stakeholders through transparent reporting.
Put these steps to work with our platform that enables enterprises to produce audit-ready metrics from raw data. Get a free Tracera demo and use our ISSB-compliant reporting software to measure and report your sustainability performance with higher accuracy and transparency.