Global menu

Our global pages


International Sustainability Standards Board publishes exposure drafts of IFRS Sustainability Disclosure Standards

  • United Kingdom
  • Corporate
  • ESG


The International Sustainability Standards Board (ISSB), which was established under the IFRS Foundation (that sets international accounting standards) at COP26, has published a consultation on its first two proposed reporting standards:

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information sets out general sustainability-related disclosure standards. The disclosure would be part of the company’s general purpose financial reporting and published at the same time as the financial statements.

IFRS S2 Climate-related Disclosures sets out climate-related disclosure requirements. It incorporates and adds to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The standards build on the four pillars of TCFD: Governance; Strategy; Risk Management and Metrics and Targets used to measure, monitor and manage significant sustainability or climate-related risks and opportunities. When the final requirements are issued, they are intended to form a comprehensive global baseline of sustainability disclosures, designed to meet the information needs of investors in assessing enterprise value.

What is the impact of this?

The TCFD recommendations are relevant in the UK to, amongst others, all UK listed companies and large corporates. However, to date, whilst there are various environmental reporting frameworks available, there are no uniform best practice reporting standards for companies that are required to comply with mandatory climate-related reporting requirements. This has been a challenge companies in scope have faced to date, and makes it more difficult for investors to benchmark companies. The ISSB was, therefore, formed to create a global baseline of sustainability-related disclosure standards that provide investors and others with details about companies’ sustainability-related information. The standards aim to impose a benchmark for regulators globally.

In the UK, for accounting periods from 6 April 2022 large corporates (including certain private companies) will be required to report certain climate-related information as described in our briefing here. Listed companies are also required by the Listing Rules to make TCFD-aligned disclosures.

What next?

The draft standards are now subject to a period of consultation until 29 July 2022. Subject to feedback, the ISSB aims to issue the new standards by the end of the year. However, it will be a matter for individual jurisdictions to determine whether companies must comply with the final standards, and this may take some time to implement. It is possible that investors will require companies to comply with the standards voluntarily even where they are not adopted nationally.

In the UK, the government has stated that the ISSB sustainability standards are likely to be a feature of the forthcoming Sustainability Disclosure Requirements which will build on the UK’s implementation of TCFD, as noted in the government’s Roadmap to Sustainable Investing published in October 2021, and which are likely to apply initially to listed companies.

Useful links

IFRS Foundation press release