The International Sustainability Standards Board (ISSB), a key arm of the IFRS Foundation, has released a comprehensive new guide aimed at supporting businesses in the effective application of the ISSB Standards for sustainability-related disclosures. This guide is designed to assist companies in identifying and disclosing material information concerning sustainability-related risks and opportunities that could impact their financial performance, including cash flows, cost of capital, and access to finance, over both short and long-term periods.
As sustainability-related information becomes a central focus for investors and global capital markets, the demand for standardized, transparent disclosures is intensifying. The new guide emphasizes the IFRS S1 framework, providing detailed guidance on how companies can disclose sustainability-related risks that arise from their dependencies on various resources—such as human, natural, and social capital—and their impacts on these resources throughout their value chain. This holistic approach aligns with the integrated thinking principle, which recognizes the interconnection between a company, its stakeholders, and the broader environmental context.
The IFRS S1 standard is at the core of this guide, with a strong focus on materiality judgments that companies are already familiar with from preparing financial statements. The guide underscores that companies utilizing IFRS Accounting Standards will be particularly well-prepared to implement ISSB disclosures, thanks to the alignment with IFRS Practice Statement 2: Making Materiality Judgements. This makes the transition to ISSB Standards more seamless, particularly for companies operating in regions where IFRS is widely adopted, such as over 140 jurisdictions globally.
Moreover, the guide also addresses the evolving needs of businesses that are looking to meet a broader range of stakeholder expectations. It provides practical considerations for companies applying ISSB Standards alongside other global sustainability frameworks, such as the European Sustainability Reporting Standards (ESRS) and Global Reporting Initiative (GRI) Standards. This ensures companies can maintain consistency and comparability in their sustainability disclosures across diverse regulatory environments.
As investor demand for ESG-related transparency continues to rise, the ISSB’s new guide serves as a critical resource for businesses seeking to meet global sustainability challenges while improving their financial reporting processes. The guide not only supports compliance with ISSB standards but also fosters informed decision-making and long-term value creation for investors and stakeholders.