The International Sustainability Standards Board (ISSB) launched its first two sustainability-related standards in June 2023, effective for annual reporting periods on or after Jan. 1, 2024. The standards could form the basis of a consistent sustainability disclosure framework for companies and investors around the world. In this article, we survey the jurisdictions that have adopted or are in the process of adopting the standards. The map and information below will be updated regularly to reflect new regulatory actions.

Since the ISSB issued its first two global sustainability standards in June 2023, jurisdictions around the world have stated their intention to adopt the standards or align reporting frameworks with them. As of March 13, 2024, five jurisdictions have adopted the standards on a voluntary or mandatory basis starting Jan. 1, 2024, and 11 other jurisdictions are planning to adopt them in the future. Many of those jurisdictions in the process of adoption are at varying stages of developing their country’s response to the standards. For example, the Canadian Sustainability Standards Board launched a consultation on March 13 to consider how to adapt the standards for the Canadian market, while the Australian government is planning to adopt the standards as of July 1, 2024. 

What are the standards? 

Under the general requirements standard, or IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, companies are required to disclose sustainability-related risks and opportunities. The climate-related disclosures standard, or IFRS S2 Climate-related Disclosures, asks for specific metrics such as greenhouse gas (GHG) emissions as well as disclosure of climate-related physical and transition risks and whether companies use scenario analysis to gauge their resilience to climate change’s impact on markets and policy.

What is the ISSB and why was it created? 

The IFRS Foundation, which develops international accounting standards, launched the ISSB to create standardized reporting rules that would complement the International Accounting Standards Board financial accounting regime, which requires companies to consider climate risk in their accounts when it is material. The ISSB’s objective was to pull the multitude of existing sustainability reporting standards together in a format resembling an IFRS standard, which are used in financial statements in more than 140 jurisdictions. The standards build on existing frameworks such as the Taskforce on Climate-related Financial Disclosures (TCFD), which has provided companies with a voluntary framework since June 2017 and uses standardized guidelines to steer companies in disclosing material climate risks. In 2024, the IFRS is taking over the monitoring of companies’ climate-related disclosures from the TCFD, which would give it greater oversight of the application of the standards. 

How will the standards be implemented and enforced? 

Ultimately, the standards will only take effect for corporate reporting if jurisdictions adopt them. The International Organization of Securities Commissions (IOSCO) endorsed the ISSB standards a month after their initial publication, signaling support for adoption in the 130 jurisdictions it represents. Those jurisdictions regulate more than 95% of the world's financial markets. 

Several jurisdictions have already announced mandatory reporting requirements based on the TCFD, and those could provide the basis for reporting according to the ISSB standards. For example, New Zealand's standard-setting body, the External Reporting Board, adopted climate-related disclosure standards for certain companies as of Jan. 1, 2023, based on the TCFD recommendations. The board said it would review the country’s climate standards by December 2025 to determine whether any changes to its standards are needed to align with any existing or forthcoming requirements. 

The UK has also had mandatory disclosures in place for certain companies since 2022 based on the TCFD recommendations. The UK Financial Conduct Authority plans to update those disclosure requirements to align them with the ISSB standards. The country’s government has also said it would create UK sustainability disclosure standards by July 2024 based on the ISSB standards.  

What guidance is the IFRS giving on ISSB adoption? 

The IFRS in February 2024 published the preview of a guide it intends to issue to help regulators adopt the standards. The full guide will be published in the first half of 2024. The preview includes a regulatory implementation program to assist regulators in designing their pathways to adopt or otherwise use the ISSB standards, the IFRS said. It also sets out the jurisdictional approach regulators can take to adopt the standards, including what steps they may have to take to apply the standards, such as:

• whether legislation or regulation is needed to apply the standards; 

• if the standards are fully transposed into regulatory frameworks or, if not, how much they align to local standards; 

• what companies the standards are targeting; 

• whether the standards are included in financial reporting and when the standards are effective.

The IFRS also said it is planning to create profiles of jurisdictions that have adopted the standards to provide details on their progress. The profiles, along with the jurisdictional guide, would “provide transparency to capital markets, regulators, other relevant authorities and other stakeholders on jurisdictional progress towards the adoption or other use of ISSB Standards,” the IFRS said. It also encourages regulators to explain how they have adopted standards to consider local circumstances.

How are regulators adopting the standards? 

Regulators are so far taking different approaches to introduce the standards, with variations between mandatory and voluntary reporting, the size of companies in scope or timelines for reporting.

Turkey’s Public Oversight, Accounting and Auditing Standards Authority designated the ISSB standards as its Turkish Sustainability Reporting Standards and made reporting mandatory predominately for listed companies as of Jan. 1, 2024. 

Bangladesh Bank’s Sustainable Finance Department issued on Dec. 26, 2023, requirements for banks and financial institutions regarding disclosures for sustainability and climate-related risks based on IFRS S1 and IFRS S2. They will be phased in over a three-year period, with institutions expected to file a limited intermediate report scheduled for June 2024, a limited supervisory report at the end of 2024, limited disclosures in annual reports in 2025, more detailed disclosures in 2026 and full disclosure in 2027. 

Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), formally integrated the ISSB standards into its regulatory framework on Oct. 20, 2023. It adopted the standards as of Jan. 1, 2024, on a mandatory basis for publicly listed companies beginning with fiscal years after Jan. 1, 2026. 

Among the jurisdictions planning to adopt, Canada’s sustainability standards board is proposing to make the standards voluntary and to allow companies a two-year exemption before they report on Scope 3 emissions, or those emissions that occur up and down a company's value chain. Under IFRS S2, companies reporting Scope 3 emissions can have a temporary exemption for a minimum of one year after the standard becomes effective. The Stock Exchange of Hong Kong is planning to require the standards for listed companies from 2025, and Hong Kong regulators are currently working with stakeholders to identify Hong Kong-specific circumstances to be considered when implementing the reporting standards.

The US Securities and Exchange Commission (SEC) announced its own climate-disclosure standards in March 2024. The EU’s Corporate Sustainability Reporting Directive came into effect in 2024. How do they compare to the ISSB standards? 

The EU has widened the reach of its sustainability reporting regulations for companies through the reform of its Non-Financial Reporting Directive to create the Corporate Sustainability Reporting Directive (CSRD), which is being phased in from Jan. 1, 2024. Companies in the scope of CSRD are subject to a set of sustainability standards called the European Sustainability Reporting Standards (ESRS). The ISSB and European Commission have stated that the ESRS climate disclosure requirements have a high degree of alignment to the ISSB climate standards, where they overlap. Under the ESRS, companies are required to disclose material environmental, social and governance impacts and risks within their upstream and downstream value chains — for example, Scope 1, 2 and 3 emissions as well as total GHG emissions.  

The SEC said in its rule that its reporting framework has elements in common with the TCFD recommendations. The rule requires companies registered under its mandate to disclose at least some material climate-related information, such as risk management practices and risks to their strategy or financial performance. Some larger companies will be required to disclose Scope 1 and Scope 2 GHG emissions — or the emissions associated with their operations and with their purchased energy — but only if the companies deem those emissions to be material.

The SEC acknowledged there were “similarities” between the ISSB standards and its final rule but said it would not recognize the ISSB standards as an alternative reporting regime for the time being.