ISSB Reporting Guide

What is the ISSB?

The International Sustainability Standards Board (ISSB) is a global standard-setting body created under the IFRS Foundation to develop sustainability-related disclosure guidelines that are integrated with financial reporting and beneficial to investors. One of the ISSB’s key purposes is to create a common global language for sustainability information, enabling companies worldwide to report on environmental, social, and governance (ESG) issues comparably, reliably, and with relevance to capital markets.

Four key objectives set by the ISSB are:

To develop standards for a global baseline of sustainable disclosures
To meet the information needs of investors
To enable companies to provide comprehensive sustainability information to global capital markets
To facilitate interoperability with disclosures that are jurisdiction-specific and/or aimed at broader stakeholder groups

The ISSB builds on insights from prior sustainability reporting frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the SASB, and establishes a more formal, principles-based approach. This includes the ISSB material guidance, requiring organisations to disclose material information on sustainability-related risks and opportunities that can reasonably be expected to affect their cash flows, finances, or capital in both the short and long term.

In practice, the ISSB is positioned as the global baseline for sustainability disclosure, similar to how IFRS Accounting Standards are the baseline for financial statements.

What are the IFRS Sustainability Disclosure Standards?

ISSB standards are not the same as traditional IFRS Accounting Standards, but both are developed under the IFRS Foundation. The IFRS Sustainability Disclosure Standards are a suite of standards requiring entities to disclose information about their sustainability-related risks and opportunities that is useful to investors and other capital-market participants. These standards are meant to be used alongside the IFRS Accounting Standards. Both standards use the same four-pillar structure, inspired by the TCFD framework, which helps organise how companies think about sustainability. The core principles of the IFRS Sustainability Disclosure Standards are as follows:

IFRS S1: General sustainability-related disclosures

This standard covers general sustainability risks affecting an organisation’s finances, such as human capital, supply chain practices, biodiversity, and data governance, and sets the overall structure for sustainability disclosures. The four pillars are the following:

Governance: How the board and management oversee sustainability-related risks and opportunities, including who is responsible at different levels, how expertise is ensured, and how oversight is integrated into overall governance practices.
Strategy: How sustainability-related factors affect the company’s business model, strategy, and long-term value creation, including time horizons, major changes in products or markets, and capital allocation.
Risk management: The processes used to identify, assess, and manage sustainability-related risks and opportunities, including how these processes are integrated with financial and enterprise risk management.
Metrics and targets: The key indicators and goals used to monitor performance, including both quantitative and qualitative metrics, and how the company tracks progress over time.

IFRS S1 also encourages companies to consider industry-specific guidance from SASB, which helps them focus on the sustainability issues most likely to affect their particular sector.

IFRS S2: Climate-related disclosures

For IFRS S2, the same four pillars are applied specifically to climate-related issues:

Companies must explain how climate risks and opportunities affect governance, strategy, and risk management.
- Physical risks and opportunities, such as floods or droughts
- Transition-related risks and opportunities, such as policy or technology shifts
Organisations must report climate-specific metrics such as greenhouse gas emissions by scope, emissions intensity, and, where relevant, financed emissions or scenario-based projections.
The standard also requires disclosure of climate-related targets such as net-zero or emissions reduction goals and how progress toward those targets is being monitored.

IFRS S2 is directly aligned with TCFD, so many organisations already use TCFD-style disclosures and may find the structure familiar, albeit more formalised.

What are the ISSB’s mandatory metrics?

The ISSB sets a list of requirements for the types of metrics that must be disclosed, but many specific indicators are left to be determined by the standard itself, the organisation, or regulators.

Under the ISSB approach, an organisation must:

Report all metrics that are explicitly required by the applicable ISSB standard
Disclose any further metrics that the company uses internally to measure and monitor its most material sustainability-related risks and opportunities, including how it tracks progress toward its targets.

For climate, this practically means companies will need to disclose carbon-related data such as scopes 1, 2, and 3 emissions, as well as other climate-related KPIs such as intensity metrics, financed emissions, and scenario-based outcomes, even if the standard doesn’t specify figures in advance. Investors should be able to see both standardised metrics and the ones that management relies on.

Are the ISSB standards mandatory?

The ISSB standards are voluntary technical standards and not laws. However, the standards become mandatory in practice when a country, regulator, stock exchange, or ecosystem of investors chooses to require or strongly incentivise their use. The ISSB standards have also become the global baseline for climate-related disclosures following the completion of the TCFD mandate in 2023. An organisation’s compliance depends on its listing, incorporation, and the regulators or investors demanding ISSB-aligned reporting.

For example:

Some regions, such as Hong Kong, the Philippines, and the UK, have announced or begun a phased-in adoption of IFRS S1- and S2-aligned rules, which require large companies or listed entities to report in line with the ISSB.
Other countries may choose to adapt or reference the ISSB framework within their own regulatory frameworks, which can also effectively make it mandatory for certain entities. For example, China plans to establish a nationwide sustainability reporting framework by 2030 that is aligned with IFRS S1 and S2.

What does the ISSB require for targets?

The ISSB does not tell every company exactly what targets it must set, but it does require clear disclosure of the targets it has chosen or is legally required to meet. A company must:

Identify the sustainability-related targets it has set
Disclose the metrics used to measure progress toward those targets, including how those metrics are calculated and defined
Explain whether it is on track to meet those targets and, if not, what is causing the gap

For climate-related targets under IFRS S2, the term typically means time-bound, quantified goals, such as “net-zero by 2050” or “30% emissions reduction by 2030”, backed by emissions data and scenario analysis, and connected to how these targets influence strategy and capital allocation. This provides investors with insights into what targets exist and how they are integrated into an organisation’s planning and risk management processes.

What is the timeline of the ISSB standards?

Since its creation, the ISSB standards have followed a timeline for issuance and implementation.

Late 2021: Creation of the ISSB

- - The ISSB is formally established by the IFRS Foundation.

2022: Exposure drafts and public consultation

- - The ISSB published the Exposure Drafts of IFRS S1 and S2, inviting feedback from organisations, investors, regulators, and other stakeholders, meant to refine the proposed structure and technical details.

June 2023: Final issuance of IFRS S1 and IFRS S2

- - The ISSB issued the first two standards, IFRS S1 and S2, and announced that both will be effective for annual periods beginning on or after January 1, 2024, with early application permitted if applied together.

July 2023: IOSCO endorsement of the ISSB standards

- - The International Organization of Securities Commissions (IOSCO) endorsed the ISSB standards, signalling to its 130+ member jurisdictions that these standards are suitable for use in regulatory frameworks, strengthening national adoption and boosting investor confidence.

2023-2024: Implementation guidance and training

- - The ISSB and national standard-setters published implementation guidance, illustrative examples, and training materials to help companies and auditors understand how to apply the standards, interpret materiality, and prepare for assurance-ready reporting.

January 2024 onwards: Initial effective date of IFRS S1 and IFRS S2

- - The standards have become formally effective for annual reporting periods beginning on or after this date, meaning companies that choose to adopt them must follow their structure and disclosure requirements from then on.

2024-2025: First wave of national adoptions and mandatory rules

- - Several jurisdictions, such as parts of Asia, Africa, Latin America, Australia, Singapore, Brazil, and the UK, began requiring or strongly encouraging ISSB-aligned reporting. This often starts with climate-related disclosures under IFRS S2 and later expands to broader sustainability under IFRS S1.

2025-2026: Expansion to more sectors and stricter enforcement

- - More countries have shifted from voluntary or “comply or explain” approaches to fully mandatory ISSB-aligned reporting for listed and large companies. Regulators and stock exchanges have also begun to tighten supervision, assurance, and data quality expectations around these disclosures.

2026 onward: New ISSB standards and continuous evolution

- The ISSB has started developing additional standards, such as biodiversity, human capital, and human rights, to extend the scope of sustainability disclosures beyond S1 and S2. Jurisdictions progressively map these new standards into their legal and listing frameworks.

What are the benefits of complying with the ISSB standards?

Aligning with the ISSB framework can create several advantages, both internally and externally:

Improved comparability for investors

When organisations use the same concepts, structure, and often similar metrics, investors can more easily compare performance across firms and sectors, which can affect capital costs and access to funding.

Stronger internal discipline

The requirement to identify, measure, and track sustainability-related risks and opportunities pushes organisations to build more robust systems for data collection, risk management, and strategic planning.

Reduced regulatory and reputational risk

Early alignment can help organisations stay ahead of evolving regulations and avoid last-minute scrambles when mandatory reporting comes into force. It also signals a commitment to transparency, which can strengthen relationships with investors, regulators, and customers.

Following global practice

Under the IFRS Foundation, reporting according to the global baseline for sustainability disclosure can help reduce complexities found in different ESG frameworks and help investors rely on a more consistent set of disclosures across borders.

Coexisting with stakeholder-oriented frameworks

The ISSB’s investor-focused approach means that other stakeholder-oriented frameworks, such as the CSRD or certain regional rules, may continue to coexist. This leads to a situation where organisations have to map one set of disclosures to multiple frameworks. Over time, however, many jurisdictions are likely to reference or adapt the ISSB standards, which would harmonise global practice and reduce duplication in reporting for multinational firms.

Today, many organisations adopting ISSB-aligned reporting treat the standards not just as a compliance exercise, but also as a way to embed sustainability into core business decisions.

How do IFRS Sustainability Disclosure Standards relate to other standards and frameworks?

The ISSB standards are designed to sit alongside, not replace, other frameworks. Key relationships with other standards and frameworks include:

Task Force on Climate-related Financial Disclosures (TCFD)

The ISSB took the TCFD’s four pillars and turned them into a formal standard. This makes IFRS S2 very close in structure and approach to TCFD, now under a recognised standard-setting body.

Sustainability Accounting Standards Board (SASB)

IFRS S1 directs companies to use SASB’s industry-specific guidance when identifying which sustainability topics are likely to be material, so many companies will effectively blend SASB topics with the ISSB structure.

EU Corporate Sustainability Reporting Directive (CSRD)

The EU’s CSRD and European Sustainability Reporting Standards (ESRS) have a broader, multi-stakeholder focus, including employees and communities, while the ISSB is investor-centric. As a result, organisations operating in Europe may need to report using both CSRD and ISSB-aligned information, mapping where they overlap and where they differ.

Global Reporting Initiative (GRI)

Similarly, the ISSB also works closely with the Global Reporting Initiative (GRI). The collaboration aims to ensure compatibility and interconnectedness between the ISSB’s investor-focused baseline sustainability information, designed to meet the needs of the capital markets, and GRI’s information intended to serve the needs of stakeholders beyond investors. In the long run, this collaboration helps reduce the reporting burden for organisations and further harmonise the ESG reporting landscape globally.

How can companies prepare for the ISSB?

Preparation for the ISSB standards typically involves a mix of governance, data, and strategy work. Many firms also work with external advisors or use sustainability software for complying with IFRS ESG disclosure requirements, building internal training, and preparing for assurance-ready reporting.

Understand applicability and timing

Companies need to check which jurisdictions and regulators require ISSB-aligned reporting, and on what timeline. This helps prioritise which entities or segments to tackle first.

Map existing disclosures to the four pillars

Existing TCFD, SASB, or other ESG reports can be reorganised into the governance, strategy, risk management, and metrics or targets structure of IFRS S1 or S2. Instead of redundancy, treat the ISSB as a new approach to existing information.

Strengthen data and systems

Organisations usually need better data collection, ownership, and controls for sustainability metrics such as emissions, resource use, social KPIs, and more. This data may need to be integrated with existing financial reporting systems.

Engage governance and strategy teams

Board and executive-level discussions should explicitly address how sustainability-related risks and opportunities affect long-term strategy, capital allocation, and risk appetite.

How Presgo Supports ISSB Reporting

Presgo is an AI-first ESG reporting platform designed by industry experts to support your organisation’s compliance with ISSB and ISSB-aligned reporting frameworks. The software is equipped with built-in modules that allow organisations to scale their sustainability reporting journey according to business growth and shifting regulatory expectations.

Data Hub

Centralise ESG data from multiple sources and map it according to ISSB-based requirements. Ensure audit-ready traceability across scopes 1, 2, and 3 emissions to reduce manual errors

Disclosure Hub

Align ESG data and narratives with the ISSB using built-in templates, framework mapping, and regulatory guidance. Directly support ISSB’s requirement for consistent, comparable, and standards-aligned disclosures.

Goals and Performance

Tracks ESG targets, KPIs, and progress over time with real-time monitoring and alerts. Comply with the ISSB’s requirement for disclosure of metrics, targets, and performance against the standards

Materiality Assessment

Enables structured identification of financially material ESG topics through stakeholder input and analysis. This is beneficial when aligning with ISSB’s focus on financial materiality.

Presgo helps companies move from fragmented ESG data to ESG-compliant and sustainable reporting that stands up to regulatory review and stands out to market expectations.