ISSB Standards

Coordination positions ISSB Standards within the comprehensive global sustainability disclosure ecosystem. (1) EU Coordination: EU Corporate Sustainability Reporting Directive (CSRD) effective phased from 1 January 2024 + European Sustainability Reporting Standards (ESRS) issued by EFRAG European Financial Reporting Advisory Group + 12 standards (ESRS 1 General Principles + ESRS 2 General Disclosures + ESRS E1-5 Environment + ESRS S1-4 Social + ESRS G1 Governance) + Double Materiality (financial materiality AND impact materiality - broader than ISSB single financial materiality) + EFRAG-ISSB Interoperability Guidance issued 2024 facilitates dual reporting for EU CSRD + ISSB-aligned reporters + EU Taxonomy Regulation 2020/852 classification of environmentally sustainable activities (climate adaptation + mitigation + water + circular economy + pollution + biodiversity) + EU Sustainable Fin

• EU CSRD ESRS dual reporting + EFRAG-ISSB interoperability + records + materiality bridge
• US SEC + California SB-253/261 + state climate + records + multistate compliance
• UK SDR + UK SRS endorsement + FCA + FRC + records + premium listing
• Australia AASB + Canada CSDS + Japan SSBJ + Korea KSSB + multi-jurisdictional records
• TCFD/TNFD/GRI/SASB/CDP heritage + audit ISAE 3000/3410 + ISSA 5000 + records

• EU CSRD + ISSB treated separately (no interoperability)
• US Federal SEC focus only (California SB-253/261 missed)
• UK SRS endorsement not tracked (will go mandatory)
• Multi-jurisdictional reporting fragmented (per-country separate teams)
• Audit assurance not pursued (ISAE 3000/3410 voluntary stage)

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information establishes the core framework + objective + principles + and content elements applicable across all sustainability topics. Objective: require an entity to disclose information about sustainability-related risks and opportunities that is useful to primary users of general purpose financial reports (primarily investors + lenders + other creditors) in making decisions relating to providing resources to the entity. Material Sustainability-Related Financial Information: per IFRS S1 + information is material if omitting + misstating + or obscuring it could reasonably be expected to influence decisions that primary users make on the basis of the entity sustainability-related financial information about a specific reporting entity. Materiality is entity-specific + decision-useful + based on what the enti

• Pillar 1 governance + responsible body + skills + reporting + records + Board minutes
• Pillar 2 strategy + time horizons + business model + financial effects + resilience + records
• Pillar 3 risk management + process + inputs + methods + integration + records
• Pillar 4 metrics and targets + cross-industry + industry-specific + remuneration + records
• Material sustainability + per reporting entity + primary users + records + materiality assessment

• Pillar 1 governance not at appropriate Board level
• Pillar 2 strategy short-term only (no medium/long horizons)
• Pillar 3 risk management not integrated with overall enterprise risk
• Pillar 4 metrics not linked to remuneration
• Materiality determination based on impact materiality not financial materiality (CSRD-style not ISSB-style)

IFRS S1 specifies sources of guidance + the relationship with industry-specific disclosure standards + and reporting principles. (1) Sources of Guidance: when applying IFRS S1 + an entity shall (a) apply IFRS Sustainability Disclosure Standards (S1 + S2 + other S-numbered standards as issued); (b) consider applicability of SASB Standards Industry-Based Volume - SASB Standards are 77 industry-specific standards covering 11 sectors (Consumer Goods + Extractives + Financials + Food and Beverage + Health Care + Infrastructure + Renewable Resources + Resource Transformation + Services + Technology and Communications + Transportation) that identify financially material industry-specific sustainability topics and metrics + with disclosure topics + accounting metrics + and activity metrics; (c) consider applicable industry practice + including industry-specific frameworks; (d) consider the most

• SASB Standards adoption + 77 industry + 11 sectors + records + per entity industry
• Connected information + sustainability-financial consistency + reconciliation + records
• Reporting boundary + IFRS 10/11/12 + value chain + records + assessment
• Comparative information + transition reliefs + restatement + records
• Compliance statement + explicit + unreserved + records + auditor concurrence

• SASB Standards not applied (industry-specific topics missed)
• Sustainability-financial disconnected (no consistency or reconciliation)
• Reporting boundary mismatched with financial statements
• Comparative information absent in subsequent years
• Compliance statement reserved or omitted

IFRS S1 addresses value chain coverage + use of estimates + time horizons + and reporting practical implementation. (1) Value Chain Considerations: an entity shall consider sustainability-related risks and opportunities arising throughout its value chain (upstream + downstream) + including direct operations + activities and resources used + customer use + employees + supplier base + outsourced activities. The value chain encompasses interactions + resources + and relationships an entity uses + or affects + to create its products or services + including those between the entity and other related parties + such as suppliers + customers + employees + value chain influence on third-parties. (2) Use of Estimates and Outcome Uncertainty: where measurement of sustainability-related impact involves estimates + entity shall disclose (a) qualitative information about sources of uncertainty + sensi

• Value chain map + upstream + downstream + records + materiality + per topic
• Use of estimates + sensitivity analysis + records + methodology + assumptions
• Time horizons + short/medium/long + per industry + per topic + records
• Comparative information + transition reliefs disclosed + restatement + records
• Climate scenarios + Paris 1.5C/2C/3C + IPCC + IEA NZE + NGFS + records

• Value chain limited to Tier 1 (no Tier 2/3 upstream + no downstream)
• Estimates undisclosed (no sensitivity analysis)
• Time horizons short-term only (no medium/long)
• Comparative information absent in subsequent years
• Climate scenarios single (e.g. only 2C, no 1.5C or 3C variations)

IFRS S2 cross-industry metrics include capital deployment + internal carbon pricing + remuneration linkage. (1) Capital Deployment Toward Climate-Related Risks and Opportunities: an entity shall disclose the amount and percentage of capital expenditure + financing + or investment deployed toward climate-related risks and opportunities + categorised as (a) climate adaptation - investment in physical risk resilience; (b) climate mitigation - investment in emission reduction + low-carbon technology; (c) climate opportunities - investment in new business models + products + markets; (d) just transition - investment in workforce transition + community support. Capital deployment relates to (i) capital expenditure (capex); (ii) operating expenditure (opex); (iii) research and development (R&D); (iv) acquisitions; (v) divestments + asset retirement; (vi) financing structures including green bon

• Capital deployment + capex/opex/R&D + climate-aligned + records + percentage
• Internal carbon price + scope + USD/tCO2e + records + business application
• Remuneration linked + percentage + KPIs + scorecard + records + Compensation Committee
• EU Taxonomy alignment + substantial + DNSH + minimum social + records
• Cross-industry + Net Zero alliance + SBTi + Climate Action 100+ + records

• Capital deployment generic (no climate categorisation)
• Internal carbon price absent (no shadow pricing in decisions)
• Remuneration not linked to climate performance
• EU Taxonomy alignment unaddressed (for in-scope entities)
• Net Zero alliance commitments aspirational without operational change

IFRS S2 Climate-related Disclosures applies the IFRS S1 4-pillar framework specifically to climate-related risks and opportunities + supersedes TCFD recommendations. (1) Scope of IFRS S2: climate-related physical risks (acute physical risks from extreme weather events + chronic physical risks from gradual climate shifts) + climate-related transition risks (policy + legal + technology + market + reputation) + climate-related opportunities (resource efficiency + energy source switching + products and services + markets + resilience). (2) Climate Governance: disclose governance processes for climate including (a) climate-responsible body or person; (b) climate skills and competencies; (c) climate information reporting cadence; (d) climate consideration in strategy + transactions + risk management; (e) climate performance metrics linked to remuneration. (3) Climate Strategy: disclose how cli

• Climate governance + responsible body + skills + Board climate competency + records
• Climate strategy + physical/transition + time horizons + financial effects + records
• Climate resilience + 2+ scenarios + Paris 1.5C + sensitivity + records + methodology
• Climate transition plan + targets + milestones + capital expenditure + just transition + records
• Industry-based climate disclosures + SASB Appendix B + records + per industry

• Climate governance absent at Board level (operational only)
• Climate strategy short-term only (no medium/long horizons)
• Climate resilience single scenario (no Paris 1.5C variant)
• Transition plan aspirational without milestones or capital
• Industry-based climate disclosures missing (SASB not applied)

IFRS S2 Metrics requires comprehensive quantification of climate-related risks + opportunities + emissions following established protocols. (1) Greenhouse Gas (GHG) Emissions per GHG Protocol: an entity shall disclose absolute gross Scope 1 + Scope 2 + Scope 3 GHG emissions + measured in metric tonnes of CO2 equivalent (tCO2e) + using GHG Protocol Corporate Standard methodology (2004 revised) + supplementary GHG Protocol Scope 2 Guidance + GHG Protocol Scope 3 Standard + GHG Protocol Product Lifecycle Standard. (a) Scope 1 - direct GHG emissions from sources owned or controlled by the entity (stationary combustion + mobile combustion + process emissions + fugitive emissions); (b) Scope 2 - indirect GHG emissions from purchased electricity + heat + steam + cooling (location-based and market-based methods both required); (c) Scope 3 - other indirect GHG emissions across 15 categories upstr

• Scope 1+2+3 GHG inventory + GHG Protocol + tCO2e + records + methodology + emission factors
• GHG reduction targets + interim + net-zero + SBTi + progress + records
• Physical risk exposure + acute + chronic + geographic + records + asset mapping
• Transition risk + capital + revenue + stranded asset + records + scenario analysis
• Independent assurance + ISAE 3000/3410 + ISSA 5000 + auditor + records + scope

• Scope 3 omitted beyond transition relief (Category 1-15 incomplete)
• GHG targets non-SBTi (not science-based)
• Physical risk geographic exposure not assessed
• Transition risk financial impact not quantified
• Independent assurance not pursued (self-disclosure only)

IFRS S2 Appendix B incorporates by reference industry-specific climate disclosures derived from SASB Standards Industry-Based Volume + adapted for ISSB. (1) 11 SASB Sectors + 77 Industries: (a) Consumer Goods (Apparel + Footwear + Multiline Retail + Toys + etc); (b) Extractives and Minerals Processing (Oil and Gas Upstream/Midstream/Refining/Services + Coal Mining + Construction Materials + Iron and Steel Producers + Metals and Mining); (c) Financials (Asset Management + Commercial Banks + Consumer Finance + Insurance + Investment Banking + Mortgage Finance); (d) Food and Beverage (Agricultural Products + Alcoholic Beverages + Food Retailers and Distributors + Meat Poultry and Dairy + Non-Alcoholic Beverages + Processed Foods + Restaurants + Tobacco); (e) Health Care (Biotech and Pharma + Health Care Delivery + Health Care Distributors + Managed Care + Medical Equipment and Supplies + Dr

• SASB industry standard + per entity + SICS classification + records
• Industry disclosure topics + per standard + records + per topic
• Accounting metrics + quantitative + records + per industry standard
• Activity metrics + industry-context + records + per industry standard
• Multi-industry + cross-sector + records + per business segment

• SASB industry standard not identified (no SICS classification)
• Industry disclosure topics partial (only easy ones)
• Accounting metrics non-quantitative (qualitative narrative only)
• Activity metrics absent (no business context)
• Multi-industry entity only single standard applied

International Sustainability Standards Board (ISSB) established by the IFRS Foundation Trustees on 3 November 2021 at COP26 Glasgow as the independent standard-setting body to develop a comprehensive global baseline of sustainability disclosure standards. ISSB operates alongside and complementarily with the International Accounting Standards Board (IASB) under the IFRS Foundation. Inaugural Chair: Emmanuel Faber (2022-) + Vice-Chair: Sue Lloyd. Headquarters: Frankfurt Germany + Montreal Canada + additional offices London + San Francisco + Tokyo + Beijing. (1) Foundational Standards Issued June 2023: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information + IFRS S2 Climate-related Disclosures. Effective for annual reporting periods beginning on or after 1 January 2024. Transition reliefs available for first-year reporters. (2) Underpinning Framework: IS

• ISSB applicability assessment + IFRS S1/S2 scope + per entity + records + sustainability inventory
• Effective date compliance + 1 January 2024 + transition reliefs leveraged + records
• TCFD/SASB/CDSB heritage + framework integration + records + cross-mapping
• Jurisdictional adoption + 30+ countries + per-country specific requirements + records
• ISSB public availability + commercial licensing + reporting standards integration + records

• ISSB not adopted (waiting for local mandate)
• Effective date missed (no first-year report)
• Heritage frameworks ignored (TCFD/SASB/CDSB integration absent)
• Single jurisdiction view (multi-jurisdictional adoption not tracked)
• Commercial use of ISSB without licensing (copyright violation)