International Sustainability Standards Board
The International Sustainability Standards Board (ISSB) is a pivotal entity in the realm of sustainability reporting standards. Established in 2021–2022 under the IFRS Foundation, the ISSB was created to develop comprehensive sustainability disclosure standards that support investor decision-making and enhance the comparability of sustainability reports across different jurisdictions.
Background and Establishment
The ISSB was formed as a response to the growing need for globally consistent and comparable sustainability disclosures. It acts as a sister organization to the International Accounting Standards Board (IASB), reflecting a semantic shift towards integrating sustainability into financial reporting. The establishment of the ISSB was supported by major international organizations, including the G7, the G20, and the International Organization of Securities Commissions (IOSCO).
Role and Objectives
The ISSB aims to create standards that enable companies to provide comprehensive sustainability information to global capital markets. It focuses on:
- Investor Decision-Making: By providing the right information in the right way, the ISSB supports informed investor decision-making.
- International Comparability: The standards facilitate international comparability, helping attract capital by ensuring that sustainability reports are consistent across borders.
- Interoperability: The ISSB's standards are designed to work in tandem with jurisdiction-specific requirements, allowing companies to meet local regulatory demands while maintaining a global reporting baseline.
Collaboration and Integration
The ISSB builds on the work of several market-led investor-focused reporting initiatives, including:
- The Climate Disclosure Standards Board (CDSB)
- The Task Force on Climate-related Financial Disclosures (TCFD)
- The Value Reporting Foundation, which includes the Integrated Reporting Framework
- The industry-based Sustainability Accounting Standards Board (SASB) Standards
Additionally, the ISSB aligns with metrics such as the World Economic Forum’s Stakeholder Capitalism Metrics.
Leadership
The ISSB is chaired by Emmanuel Faber, an influential leader in the field of sustainability. His leadership is crucial in guiding the ISSB’s mission to develop standards that address global sustainability challenges effectively.
Standards Development
The ISSB has introduced key standards like IFRS S1, which covers general sustainability disclosures, and IFRS S2, which focuses on climate-related disclosures. These standards are instrumental in transitioning towards comprehensive environmental, social, and governance (ESG) reporting frameworks.