ISSB

International Sustainability Standards Board (ISSB)

The International Sustainability Standards Board (ISSB) was established by the IFRS Foundation to develop a comprehensive global framework for corporate sustainability and climate disclosures. This initiative addresses the increasing demand from investors, lenders, and other stakeholders for transparent and standardized information on how environmental and social factors impact a company's financial performance and long-term value. The ISSB standards are designed to be used alongside traditional financial statements, providing a holistic view of a company's resilience and strategy.

The ISSB’s framework consolidates and builds upon the work of pre-existing standards, most notably the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Its first two landmark standards form the foundation of this new global baseline:

Key Standards

   
•      IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information:      Sets the overall framework for how an organization should disclose its sustainability-related financial information, ensuring relevance, faithful representation, and connection to the financial statements.    
   
•      IFRS S2 Climate-related Disclosures:      Specifies how companies must report on their climate-related risks and opportunities, including governance processes, transition strategy, and quantitative impacts such as carbon compliance costs.    
 

Concrete Examples

   
•      Corporate Reporting: A major airline subject to emissions regulations uses IFRS S2 to disclose its exposure to transition risks—like rising carbon prices—its fleet modernization plans, and its budget for purchasing European Union Allowances (EUAs) to comply with the EU ETS. This helps investors evaluate the financial viability of its climate strategy.    
   
•      Investor Decision-Making: An investment fund manager compares the standardized sustainability disclosures of two industrial companies under ISSB standards. By analyzing their GHG emissions, transition plans, and capital allocation toward climate solutions, the manager can make robust, impact-aligned investment choices.