ISSB Confirms Content of Two New Sustainability Disclosure Standards

• Ery Dimitrantzou

• Last Updated: January 13, 2026
• Summary of the Initial Two IFRS Sustainability Disclosure Standards
• Role of Pre-existing Standards and Frameworks

The International Sustainability Standards Board (ISSB) met in Montreal recently and announced its final decision on the technical content of its initial two IFRS Sustainability Disclosure Standards. The ISSB’s Standards will now go through a thorough drafting and formal ‘balloting’ approval process. This is ahead of their issuance towards the end of Q2 2023. Established at COP26 in late 2021, the ISSB has developed a comprehensive global baseline of sustainability disclosures for the capital markets. One sets out general sustainability-related disclosure requirements and the other specifies climate-related disclosure requirements.

Summary of the Initial Two IFRS Sustainability Disclosure Standards

The ISSB’s initial two standards focus on general sustainability disclosure requirements (IFRS S1) and climate (IFRS S2). The release of the Proposals took place in March 2022. After these, the ISSB received 1,400+ comment letters, that the ISSB considered in its 2022 and 2023 board meetings.

S1 asks for disclosure of material information about a company’s sustainability-related risks and opportunities. It uses the same definition of material used in IFRS Accounting Standards. That is, companies must determine that information is material. This includes if absent, obscured, or misstated could be reasonably expected to influence investor decisions.

S1 emphasizes consistency and connections between financial statements and sustainability disclosures. It also requires companies to publish financial statements and sustainability disclosures simultaneously. The ISSB has introduced a transitional relief to allow later reporting of the sustainability information aligned with the first-half results for a short period.

S2 sets out the disclosure of material information about climate-related risks and opportunities. It also includes disclosure about physical risks (such as flood risk), transition risks (such as regulatory change), and climate-related opportunities (such as new technologies).

The ISSB has developed a package of reliefs and guidance to support the initial use of the Standards. This is part of its work to support adoption and high-quality disclosures. The goal is to enable companies at all stages of sustainability disclosure to scale up their approach to using them over time.

Role of Pre-existing Standards and Frameworks

The ISSB is building off existing and widely used standards and frameworks. This is part of its work to consolidate a fragmented disclosure landscape and provide a clear pathway for current sustainability reporters. Here’s how these are being used in the ISSB’s work:

SASB Standards

2,500 companies worldwide use the SASB Standards. The Standards are made up of 77 industry-based disclosure standards developed to provide decision-useful information to investors.

• Using the SASB Standards now will help in the future application of IFRS Sustainability Disclosure Standards.
• S1 specifies that industry-specific disclosures are required by those applying the ISSB’s Standards. Companies need to consider the existing SASB Standards to identify topics and metrics to disclose in the absence of a specific ISSB Standard.
• This means the ISSB will continue to support the SASB Standards on a standalone basis for at least four years, and realistically probably longer. This will be while the ISSB continues its standard-setting activities using the SASB Standards as a basis.
• The ISSB has introduced a rigorous due diligence process to ensure the SASB Standards are maintained and enhanced over this time. Any proposed changes will be subject to public consultation.
• The climate-related aspects of the SASB Standards are now illustrative guidance that a company needs to consider. However, it is not required to use when using S2.
• More information on the future of the SASB Standards.

TCFD Recommendations

The TCFD Recommendations have over 4,000 supporters worldwide and were designed to solicit decision-useful, forward-looking information that can be included in mainstream financial filings.

• The TCFD architecture has adopted the core structure of the IFRS Sustainability Disclosure Standards to solicit information on governance, and strategy. As well as risk management, metrics, and targets. S1 and S2 fully incorporate the TCFD Recommendations. Those disclosing against S1 and S2 will meet the TCFD Recommendations.

CDSB Framework

The CDSB Framework has been incorporated into S1 and S2. CDSB application guidance on biodiversity-related and water-related disclosures are sources of guidance a company can consider in its disclosures to investors in the absence of a specific ISSB Standard.

Integrated Reporting Framework

The Integrated Reporting Framework is a principles-based, multi-capital framework used by over 2,500 companies in more than 75 countries to communicate how a company creates, preserves, and erodes value over time for itself and its investors.

• The S1 reflects the Integrated Reporting Framework’s concepts to describe the relationship between sustainability and financial value creation.
• Companies should use the Integrated Reporting Framework to support high-quality corporate reporting. In addition to driving connectivity between financial statements and sustainability-related financial disclosures.

For more information on these upcoming ISSB standards, click here.

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