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ISSB Introduces Groundbreaking Global Sustainability Disclosure Standard

On 26 June, the International Sustainability Standards Board (ISSB) issued its inaugural standards—IFRS S1 and IFRS S2 —ushering in a new era of global sustainability-related disclosures in capital markets. They will enhance trust and confidence in company disclosures about sustainability providing crucial information for investment decision-making. The Standards create a common language for disclosing the effect of climate-related risks and opportunities on a company’s prospects.

A global baseline

The ISSB Standards are suitable for application worldwide, creating a global baseline. The ISSB formed IFRS S1 and S2 in response to calls from the G20, the Financial Stability Board, and the International Organization of Securities Commissions (IOSCO).

It ensures companies provide sustainability-related information and financial statements in the same reporting package. The Standards have been developed to be used with any accounting requirements and are also built on the concepts that underpin the IFRS Accounting Standards, which more than 140 jurisdictions require.


About the Standards

IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium, and long term. IFRS S2 sets out specific climate-related disclosures and is designed to be used with IFRS S1. Both fully incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).


Adoption of the ISSB Standards

IFRS S1 and S2 are planned to be effective for annual reporting periods beginning on or after 1 January 2024.

The ISSB will work with jurisdictions and companies to support adoption. The first steps will be creating a Transition Implementation Group to support companies that apply the Standards and launching capacity-building initiatives to support effective implementation.The ISSB will also continue to work with jurisdictions that require incremental disclosures beyond the global baseline and with GRI to support efficient and effective reporting when the ISSB Standards are applied in combination with other reporting standards.

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RBI Regulatory Advisory

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