ISSB calls for unified sustainability reporting

The IFRS Foundation’s International Sustainability Standards Board (ISSB) has announced a series of initiatives aimed at assisting jurisdictions in adopting its sustainability reporting standards. These measures are designed to enable the standards to function as a “global passport,” facilitating the acceptance of standards-aligned reports across different regions.

Launched in November 2021 at the COP26 climate conference, the ISSB was established to create IFRS Sustainability Disclosure Standards, providing investors with insights into companies’ sustainability risks and opportunities. In June 2023, the IFRS released its inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards.

Introduced by ISSB Chair Emmanuel Faber at the IFRS Foundation’s annual Sustainability Symposium, the new initiatives come as the number of jurisdictions planning to use ISSB Standards has increased to around 40. This growth has necessitated measures to address potential fragmentation.

At the Symposium, Faber announced the significant expansion of the Jurisdictional Working Group. Initially established in 2022 to enhance compatibility between the standards’ development and other jurisdictional sustainability disclosure initiatives, this group has been renamed the Jurisdictional Adopters Working Group. Its focus is to facilitate discussions among regulators on enabling the ISSB standards to serve as a global passport, addressing emerging cross-border issues.

The ISSB stated that expanding the group responds to the growing number of jurisdictions planning to use the standards and the need for a mechanism to help stakeholders discuss global passporting arrangements. “The introduction of passporting provisions, so that jurisdictions accept reports prepared in accordance with the ISSB Standards as issued by the ISSB—accommodating jurisdiction-specific conditions as needed—will help lower costs for preparers and reduce frictions in the system to deliver efficiencies and comparable information for capital markets and preparers,” the ISSB explained.

Additionally, the ISSB released a new “Jurisdictional Rationale Guide” to aid jurisdictions in developing sustainability-related reporting regimes tailored to their specific needs and objectives while contributing to globally consistent and comparable information for capital markets. An accompanying Jurisdictional Rationale Tool has also been introduced to support the development of a clear rationale for using the standards and to guide the creation of an adoption roadmap.

ISSB Chair Emmanuel Faber remarked that the expansion of the Jurisdictional Adopters Working Group and the new guide respond to jurisdictions’ needs for forums, tools, and resources supporting the effective use of ISSB Standards as the global passport.