What is the ISSB?
The International Sustainability Standards Board (ISSB) is the standards-setting body established by the IFRS Foundation in November 2021 to develop a global baseline of sustainability disclosure standards for capital markets. ISSB sits alongside the IASB (which sets IFRS Accounting Standards) and operates under the same Foundation governance. Its first two standards — IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) — were issued in June 2023 and became effective for periods beginning on or after 1 January 2024.
ISSB mission and approach
- Investor-focused: standards designed to meet the needs of capital market participants.
- Financial materiality: ISSB standards apply enterprise value lens — risks and opportunities that affect company value.
- Building-blocks approach: jurisdictions can add additional reporting (e.g., EU’s CSRD double materiality) on top of the ISSB baseline.
- Global comparability: reduces patchwork sustainability reporting across markets.
ISSB vs. CSRD/ESRS
- ISSB: financial materiality only (single materiality from value perspective).
- CSRD/ESRS: double materiality — financial + impact materiality.
- Interoperability work underway to allow companies to satisfy both with structured supplementary disclosures.
Why the ISSB matters for company disclosure
The International Sustainability Standards Board (ISSB), established under the IFRS Foundation, sets a global baseline for sustainability-related financial disclosure. Its first standards — IFRS S1 (general sustainability-related disclosures) and IFRS S2 (climate-related disclosures) — aim to give investors consistent, comparable information in the same way financial accounting standards do. The significance is convergence: rather than a patchwork of competing ESG frameworks, the ISSB is becoming the reference that many jurisdictions adopt or build on. For companies, particularly those raising capital internationally or supplying large listed customers, this points toward mandatory, audit-grade sustainability reporting; getting the governance, data and controls in place early is far easier than retrofitting them once disclosure becomes a hard requirement.