IFRS Foundation: ISSB (International Sustainability Standards Board)

Global baseline for sustainability-related financial disclosure.
Standards: IFRS S1 (General Requirements), IFRS S2 (Climate), endorsed by G7, G20, IOSCO, and adopted in 140+ jurisdictions.

Jurisdictions

140+

Countries referencing or adopting ISSB standards

Mandatory/Planned

15 / 21

15 mandatory, 21 planning adoption (2025)

Key Endorsements

G7, G20, IOSCO

Global regulatory support

First Effective

2024

Reporting for periods from Jan 1, 2024

IFRS S1 and S2: Key Features

Standard	Scope	Focus	Key Requirements	Relation
IFRS S1	All sustainability-related risks & opportunities	Financial materiality, investor needs	Disclose material sustainability risks/opportunities; Integrate with financial statements; Industry-specific (SASB) guidance	Baseline, applies with S2
IFRS S2	Climate-related disclosures	Climate risk, opportunities, metrics	Governance, strategy, risk management, metrics & targets; TCFD-aligned; Physical & transition risks	Builds on S1, TCFD

Global ISSB Adoption Progress (2025)

Number of jurisdictions adopting or planning to adopt ISSB standards as of Q1 2025.

ISSB vs. Other Frameworks

Framework	Materiality	Scope	Mandatory?	Global Reach
IFRS ISSB (S1/S2)	Financial	All sectors, global	Yes/Planned	140+ jurisdictions
EU CSRD	Double	EU, large companies	Yes	EU
TCFD	Financial	Climate	Voluntary/Some mandatory	Global
SASB	Financial	Industry-specific	No	Global

IFRS Foundation & ISSB Governance

Monitoring Board: Ensures public accountability
Trustees: Oversee strategy, funding, appointments
ISSB Board: Sets and updates standards
Sustainability Consultative Committee: Engages stakeholders, reviews evolving risks
Consolidates: SASB, IIRC, CDSB legacy frameworks

About the ISSB and IFRS S1/S2

The International Sustainability Standards Board (ISSB), established by the IFRS Foundation, sets a global baseline for sustainability disclosures focused on financial materiality and investor needs. IFRS S1 requires companies to disclose all material sustainability-related risks and opportunities alongside financial statements, while IFRS S2 mandates climate-related disclosures aligned with TCFD recommendations. Endorsed by G7, G20, IOSCO, and adopted or planned in over 140 jurisdictions, ISSB standards are reshaping capital market transparency and accountability worldwide.

Note: All data reflects official IFRS, IOSCO, and S&P Global updates as of May 2025.

IFRS Foundation - ISSB (International Sustainability Standards Board)

IFRS Foundation – ISSB (International Sustainability Standards Board)

Countries: Global (endorsed by G7, G20, IOSCO, used in 140+ jurisdictions)
Function: Sets baseline sustainability disclosure standards (IFRS S1 & S2) focused on financial materiality and investor needs

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The IFRS Foundation, historically responsible for setting international accounting standards through the International Accounting Standards Board (IASB), expanded its mandate in response to the systemic inadequacy of financial reporting to capture sustainability-related risks and opportunities. In 2021, the Foundation launched the International Sustainability Standards Board (ISSB) to develop a comprehensive, globally consistent framework for sustainability disclosure aligned with financial materiality principles.

The ISSB’s purpose is to establish a unified baseline for sustainability-related financial disclosures, enabling comparability, reliability, and relevance across jurisdictions and industries. It aims to integrate sustainability factors into traditional capital market disclosures to support informed decision-making by investors, creditors, and other providers of capital. Unlike purely voluntary ESG frameworks, ISSB standards are designed to complement mandatory financial reporting under IFRS Accounting Standards and converge with existing regulatory initiatives.

Key innovations of the ISSB include the development of two inaugural standards:

IFRS S1: General Requirements for Disclosure of Sustainability-Related Financial Information, providing a framework for integrating sustainability factors into general-purpose financial reporting.
IFRS S2: Climate-Related Disclosures, building directly on the TCFD recommendations, requiring entities to disclose governance, strategy, risk management, and metrics related to climate risks and opportunities.

The ISSB emphasizes financial materiality, focusing disclosures on sustainability factors reasonably expected to influence enterprise value over the short, medium, or long term. (This contrasts with double materiality models like those used in the European Union’s CSRD, although efforts are ongoing to ensure interoperability between systems).

The IFRS Foundation’s governance structure, involving the Monitoring Board, Trustees, and the new Sustainability Consultative Committee, is designed to maintain public accountability and ensure responsiveness to evolving sustainability risks and investor needs.

The ISSB consolidates legacy frameworks, including the Value Reporting Foundation (formerly SASB and IIRC) and aspects of the Climate Disclosure Standards Board (CDSB), creating a more streamlined disclosure landscape.

The ISSB’s standards have been formally endorsed by global regulatory coalitions such as the G7, G20, and IOSCO, and adoption is underway across a wide range of jurisdictions, including major economies in Asia, Europe, and the Americas. This positions the ISSB as the “de facto” global baseline for sustainability-related financial disclosure, upon which national regulators may build with jurisdiction-specific additions such as double materiality or sectoral specificity.

The establishment of the ISSB represents a structural evolution in capital market regulation, redefining the boundaries of fiduciary duty by embedding sustainability into the financial reporting architecture. It is a critical mechanism for enhancing the efficiency, resilience, and accountability of global financial systems during the ongoing transition toward a low-carbon, socially inclusive economy.