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ISSB

International Sustainability Standards Board

The global investor-focused baseline — IFRS S1 and S2 for capital markets

Launched

2023 (IFRS S1 and S2 published June 2023)

Governed by

IFRS Foundation (Basel, Switzerland)

Audience

Capital markets investors, financial regulators, standard setters

Mandatory

Voluntary

Report Format

Integrated into general-purpose financial reports; aligned with financial statement structure

Update Cycle

IFRS S1 (general), IFRS S2 (climate) published 2023; sector-specific standards under development

Adopted/referenced as mandatory in UK, Australia, Japan, Singapore, Canada, New Zealand; under consideration in EU

Overview

The International Sustainability Standards Board (ISSB), established under the IFRS Foundation in 2021, published IFRS S1 and IFRS S2 in June 2023. These standards provide the first globally consistent, investor-focused baseline for sustainability disclosure. ISSB was built by consolidating TCFD (climate), SASB (industry metrics), IIRC (integrated reporting), CDSB, and VRF under a single governance structure. Regulators in over 20 jurisdictions are adopting or referencing ISSB as the foundation for mandatory reporting.

Why It Matters for ESG Analysis

ISSB represents the most significant development in the history of sustainability reporting: the possibility of a global, mandatory, audited, investor-grade baseline that works across jurisdictions. When adopted, ISSB creates the same comparability for sustainability information that IFRS created for financial information. For investors, analysts, and companies operating in multiple jurisdictions, ISSB is the most important framework to understand.

Key Requirements

IFRS S1 — Sustainability-related financial disclosures

required

Governance, strategy, risk management, metrics for all material sustainability topics

IFRS S2 — Climate-related disclosures

required

Physical and transition risk, Scope 1/2/3 emissions, climate targets, scenario analysis

Industry-specific metrics

recommended

Use SASB Standards to identify material industry metrics pending ISSB sector standards

Connectivity with financial statements

required

Disclose how sustainability risks affect financial position and performance

Cross-industry climate metrics

required

Absolute GHG emissions (Scopes 1, 2, 3), GHG intensity, internal carbon price, climate targets

IFRS S1: The general standard

IFRS S1 sets the overarching requirements for sustainability-related financial disclosures. It applies the TCFD's four-pillar structure (Governance, Strategy, Risk Management, Metrics & Targets) to all sustainability topics — not just climate. Under IFRS S1, companies must disclose information about sustainability-related risks and opportunities that could reasonably be expected to affect a company's cash flows, access to finance, or cost of capital.

IFRS S2: The climate standard

IFRS S2 provides specific requirements for climate-related disclosures, incorporating and extending all TCFD recommendations. It requires disclosure of physical and transition risks and opportunities, scenario analysis (at least one aligned with 1.5°C), all Scope 1 and 2 GHG emissions (Scope 3 if material), and climate-related targets. IFRS S2 also includes eight cross-industry climate metrics as mandatory disclosures.

  • Absolute gross GHG emissions (Scopes 1, 2, 3)
  • GHG intensity per unit of revenue
  • Internal carbon price (if used in decision-making)
  • Percentage of renewable energy consumption
  • Climate-related physical risk exposure (by asset class)
  • Climate-related transition risk exposure
  • Climate-related executive remuneration
  • Climate-related capital expenditure and financing

The global interoperability roadmap

ISSB has committed to global interoperability — ensuring companies can use IFRS S1/S2 as a baseline and satisfy additional jurisdictional requirements with targeted additions rather than starting over. The EU EFRAG has mapped ISSB to ESRS to identify where CSRD requirements go further. The UK FCA has mapped ISSB to its TCFD regime. IOSCO (the global securities regulator body) has endorsed ISSB, accelerating adoption.

Common Misconceptions

ISSB is not mandatory globally — adoption is at each jurisdiction's discretion. Check your specific regulatory environment.

ISSB is financially materiality-focused — like SASB, it does not require disclosure of all impacts (only those financially material). This is fundamentally different from GRI's impact materiality approach.

Reporting under ISSB does not automatically satisfy CSRD — CSRD (via ESRS) goes significantly further on double materiality and breadth of topics.

How OpenESG Scores ISSB

OpenESG evaluates ISSB/IFRS S1&S2 alignment by assessing the four disclosure pillars plus cross-industry climate metrics. For companies that previously reported under TCFD, we automatically apply ISSB alignment credit where the TCFD disclosure satisfies equivalent ISSB requirements.

View ISSB scores Official website

Related Frameworks

SASB

Sustainability Accounting Standards Board

Industry-specific ESG metrics for financial decision-making

Learn more

TCFD

Task Force on Climate-related Financial Disclosures

The four-pillar framework for climate risk disclosure — now superseded by ISSB

Learn more

CSRD

Corporate Sustainability Reporting Directive

The EU's mandatory sustainability reporting law — the most comprehensive in the world

Learn more
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