What You Need to Know About the IFRS ISSB Reporting Framework
· Posted on: March 26th 2026 · read
This insight was co written by Tomasz Piasecki and Maisie Williams.
The International Sustainability Standards Board (ISSB) was announced by the IFRS Foundation Trustees on 3 November 2021 at COP26 in Glasgow. It operates alongside the International Accounting Standards Board (IASB) under the governance of the IFRS Foundation, with a mandate to develop a comprehensive global baseline of sustainability-related financial disclosure standards. These standards are intended to improve the consistency and comparability of information provided to investors and other capital market participants.
The ISSB’s first two standards, IFRS S1 and IFRS S2, were issued in June 2023 and are effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted, subject to the conditions set out in the standards.
As of 25 February 2026, the UK government had confirmed that it would endorse the IFRS Sustainability Disclosure Standards and issue UK SRS S1 and UK SRS S2 for voluntary use in the UK. The FCA launched Consultation Paper CP26/5 on 30 January 2026, with consultation closing on 20 March 2026, setting out proposals to align listed issuers’ sustainability disclosures with international standards as the UK transitions towards a UK SRS-based framework. The government’s UK SRS are intended for voluntary use initially, while any future mandatory reporting requirements for listed issuers would be subject to subsequent FCA rulemaking; although industry expectations point to potential mandatory adoption around 2027–28, no official timeline has been confirmed by the UK government or the FCA to date.
IFRS S1- General Requirements for Disclosure of Sustainability related Financial Information. IFRS S1 adopts a 4-pillar structure like TCFD, and it requires businesses to disclose material sustainability related risks and opportunities across these 4 pillars:
Governance
Strategy
Risk Management
Metrics and Targets
IFRS S2- Climate related disclosures. The aim of IFRS S2 is to build upon the requirements established in S1 and fully incorporate and enhance TCFD recommendations. Like S1 it is structured under the same 4 pillars. However, it also goes into 4 more areas of key reporting requirements:
Climate risk and opportunity- focusing on both physical and transition risks as well as going into climate related opportunities
Scenario analysis- the mandatory use of climate scenario analysis and necessity of disclosure of business resilience under different emission scenario pathways
Mandatory greenhouse gas emission disclosure- split by scope and allowing a transitional relief year for disclosure of scope 3 emissions
Climate targets- disclosure of net zero commitments, interim targets and use of any carbon credits
What is ISSB
The ISSB (International Sustainability Standards Board) is an independent standard-setting body created by the IFRS Foundation to develop a global baseline of high-quality, investor focused sustainability disclosure standards. Its purpose is to ensure that companies provide consistent, comparable, and decision-useful information about sustainability related risks and opportunities to financial markets. The ISSB consolidates and builds on earlier sustainability initiatives, including TCFD, SASB, CDSB, and the Integrated Reporting Framework, to reduce fragmentation and unify sustainability reporting under a single global system.
Details about S1
IFRS S1 is a general requirements standard that sets the overarching framework for sustainability related financial disclosures, 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.
The information provided about sustainability-related risks and opportunities is based on the four content elements set out in the TCFD recommendations and in addition, industry-based information is required to be provided.
Details about S2
The objective of IFRS S2 Climate-related Disclosures is to require an entity to disclose information about its climate-related risks (including both physical and transition risks), and opportunities that are useful to primary users of general purpose financial reports. The objective of climate-related financial disclosures on strategy is to enable users of general-purpose financial reports to understand an entity’s strategy for managing climate-related risks and opportunities.
To achieve this objective, an entity shall disclose information about:
the governance body(s) (which can include a board, committee or equivalent body charged with governance) or individual(s) responsible for oversight of climate-related risks and opportunities.
Management’s role in the governance processes, controls and procedures used to monitor, manage and oversee climate-related risks and opportunities
Regarding climate resilience, the entity shall disclose
the entity’s assessment of its climate resilience as at the reporting date, which shall enable users of general-purpose financial reports.
how and when the climate-related scenario analysis was carried out.
IFRS S1 and S2 are just the first two standards to be released by the ISSB. As time goes on, more standards are likely to be released, so businesses should keep up with news and announcements coming from the ISSB to ensure they are best prepared for the new additions. There is much anticipation around IFRS S3 with expectations that it will focus on biodiversity, ecosystems and ecosystem services (BEES) after the ISSB moved its BEES project from research to standard setting in its work plan. IFRS - Biodiversity, Ecosystems and Ecosystem Services
Amendments to Greenhouse Gas Emissions Disclosures
Issued in June 2023, IFRS S2 Climate-related Disclosures sets out the requirements for an entity to disclose information about its climate-related risks and opportunities that is useful to primary users of general-purpose financial reports.
In December 2025, the International Sustainability Standards Board (ISSB) issued Amendments to Greenhouse Gas Emissions Disclosures, which amended IFRS S2.
The amendments support entities applying specific greenhouse gas emissions disclosure requirements in IFRS S2, particularly during the implementation phase.
The amendments are effective for annual reporting periods beginning on or after 1 January 2027, with early application permitted.
Who already uses the standards and what companies use them on voluntary basis
IFRS Standards are designed to meet the needs of existing and potential investors, lenders, and other creditors.
The ISSB Standards (IFRS S1 & IFRS S2) are being adopted by jurisdictions and companies worldwide. As of 2025, 37 jurisdictions have decided to use or take steps toward integrating ISSB Standards into regulatory frameworks. These jurisdictions represent ~60% of global GDP, 40%+ of market capitalization, and ~60% of global GHG emissions.
Companies choosing to apply ISSB Standards on a voluntary basis typically fall into these categories:
- Businesses responding to strong investor pressure for greater transparency and high quality sustainability reporting.
- Large multinationals seeking globally comparable disclosures across markets where regulatory requirements differ or are still emerging.
- Organizations transitioning from existing frameworks, such as TCFD, SASB, or local ESG standards, to the unified global baseline provided by ISSB.
- Companies preparing ahead of future mandatory reporting obligations in jurisdictions currently moving toward ISSB adoption.
How ISSB standards connect with other frameworks (e.g. interoperability with ESRS)
EFRAG, the body advising on European reporting standards, and the International Sustainability Standards Board (ISSB) have published joint guidance on the interoperability between European and international standards.
The IFRS–EFRAG Interoperability Guidance confirms a high degree of alignment between ISSB Standards (IFRS S1/S2) and the ESRS, highlighting compatibility across materiality assessments, presentation requirements, and general sustainability disclosures, including sustainability topics beyond climate. It emphasizes that both frameworks share common defined terms and that their approaches to financial materiality are closely aligned, even though ESRS applies to a broader double-materiality lens. On climate, the guidance shows strong interoperability, with almost all IFRS S2 climate related disclosure requirements present within the ESRS framework, thereby reducing duplication and enabling companies to collect decision useful data once while meeting both ISSB and ESRS expectations. related disclosure requirements present within the ESRS framework, thereby reducing duplication and enabling companies to collect decision useful information while meeting both ISSB and ESRS expectations.
ISSB’s climate standard IFRS S2 is built directly on, and fully supersedes, the TCFD framework, carrying forward its governance, strategy, risk management, and metrics pillars to maintain continuity in market expectations. The 2024 IFRS Climate Related Disclosures Report confirms that the ISSB Standards represent the culmination of TCFD’s work, with the TCFD disbanding in 2023 after IFRS S1 and S2 were issued, and the IFRS Foundation now overseeing global monitoring of climate related reporting in its place. The 2024 IFRS Climate Related Disclosures Report confirms that the ISSB Standards represent the culmination of TCFD’s work, with the related reporting in its place .
Across all comparisons, ISSB demonstrates the lowest compatibility with social dimensions. This is expected because ISSB’s current standards, especially IFRS S2, are climate centric, governance-heavy, and financially materiality oriented. Where interoperability exists, it is mostly procedural (governance, risk management, strategy processes) rather than substantive (labour rights, equity, stakeholder impacts.)
According to the IFRS Foundation’s official introduction to the ISSB, the ISSB has formally consolidated the work of the Climate Disclosure Standards Board (CDSB) into the IFRS Sustainability Disclosure Standards. This consolidation means that CDSB’s climate and environmental related disclosure principles, frameworks, and technical guidance are now embedded within the ISSB Standards.
What countries have endorsed the standards to date/ What countries are planning to endorse:
The IFRS foundation published 17 jurisdictional profiles demonstrating a high degree of alignment with the ISSB standards. These 17 profiles are Australia, Bangladesh, Brazil, Chile, Ghana, Hong Kong SAR, Jordan, Kenya, Malaysia, Mexico, Nigeria, Pakistan, Sri Lanka, Chinese Taipei, Tanzania, Türkiye and Zambia. These profiles included:
14 that have set a target of fully adopting ISSB standards
2 with the target of adopting the climate requirements
1 that targets partially incorporating ISSB standards
The table below lists these jurisdictions and the stage of adoption they have reached:
| Country | Status of implementation |
|---|---|
| Australia | Adopted |
| Bangladesh | Adopted |
| Bolivia | Adopted |
| Brazil | Adopted |
| Canada | Adopted |
| Chile | Adopted |
| China | Finalised |
| Costa Rica | Adopted |
| Hong Kong | Finalised |
| Jordan | Adopted |
| Malaysia | Adopted |
| Pakistan | Adopted |
| Singapore | Finalised |
The IFRS sustainability disclosure standards have been adopted or otherwise used by 36 jurisdictions. Different jurisdictions have made different commitments to adoption. While some have opted for full adoption and endorsement, others are still finalising and planning their adoption with reporting starting at later dates or have chosen partial adoption options.
Other jurisdictions may not have made any official adoptions or endorsements as of yet but have announced plans to endorse in the future. The table below lists the countries that are planning to endorse in the future:
| Country | Commitment |
|---|---|
| Indonesia | Consultation ongoing, target Jan 2027 |
| Japan | Review / consultation phase |
| Mexico | Comment letters review underway |
| Nigeria | Commitment made; phased adoption planned |
| Philippines | Commitment / consultation phase |
| Qatar | Consultation phase for local standards |
| South Korea | Comment letter review on local adoption |
| Kenya | Government commitment with agenda to implement |
| Ghana | Government commitment with agenda to implement |
The EU has not formally adopted IFRS ISSB standards instead using its own standards, the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). However, the EU and the IFRS foundation have published interoperability guidance to support companies in compliance with both ESRS and ISSB reporting requirements.
The EU has not formally adopted IFRS ISSB standards instead using its own standards, the European Sustainability Reporting Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). However, the EU and the IFRS foundation have published interoperability guidance to support companies in compliance with both ESRS and ISSB reporting requirements.
UK perspective:
In the UK, the government has tailored IFRS S1 and S2 from the ISSB into a set of reporting standards called the UK Sustainability Reporting Standards (UK SRS). The UK Government confirmed UK SRS for phased voluntary adoption in February 2026 and mandatory requirements are expected to be introduced at a later date23
The consultation on the exposure drafts for the UK SRS and a consultation on the development of an oversight regime for assurance of sustainability related financial disclosures took place from the 25th June 2025 to the 17th September 2025.
Consultation from FCA:
On 30th January 2026, the Financial Conduct Authority announced the initiation of a consultation open until 20th March 2026 aiming to finalise in autumn of 2026. The aim of the consultation is to replace current rules for listed company climate disclosures with proportionate rules with aim to:
- Align reporting with current international standards
- Achieve an implementation approach that reflects readiness of listed companies
- Ensure clear consistent and robust information on sustainability risks and opportunities for use by investors
- Support overseas companies in transparency of sustainability reporting and removal of duplication.
Any other considerations:
At the January 2026 meeting of the Technical Advisory Committee, the TAC agreed to finalise and submit revised consultation responses to the Greenhouse gas protocol and ISSB. IFRS S2 requires emissions reporting to be done in accordance with the Greenhouse Gas Protocol, therefore any changes to the GHG Protocol would affect the implementation of the UK SRS.
The TAC identified certain areas where clarification is needed in IFRS S1 and S2 before the UK SRS can be implemented. It has agreed to proceed with drafting the UK SRS, preparing endorsement decisions, and aligning this work with the FCA’s decision-making process.
How UK companies should prepare in 2026:
Following on from the confirmation of UK SRS, companies should make the most of 2026 for preparing and familiarising themselves with the requirements of the legislation and begin thinking about how they want to structure their disclosures.
Companies already reporting under TCFD will be able to draw similarities between the reporting requirements and achieve ISSB compliance through expansion on their current disclosures and gap-analysis.
Through preparation and planning, by the time the requirements become mandatory, compliance will be easier to achieve. If the voluntary nature of the reporting is exploited and companies fail to make effort with their reporting, grater challenges will arise later.
