ISSB: a guide to the IFRS S1 and IFRS S2 sustainability standards

The ISSB (International Sustainability Standards Board) is the body that issues the global sustainability disclosure standards IFRS S1 and IFRS S2. Its aim is for companies' sustainability information to be as comparable and reliable as financial information, with a single baseline for capital markets around the world.

In this guide we explain what the ISSB is, what its first two standards require, what benefits they bring and how their adoption is progressing as of 2026.

What is the ISSB?

The International Sustainability Standards Board was created in November 2021, during COP26, under the umbrella of the IFRS Foundation, the same body that backs the IASB (the board that issues the IFRS accounting standards). The idea was to put an end to the fragmentation of voluntary reporting frameworks (GRI, SASB, TCFD, CDP) by offering a common, global baseline.

In fact, the ISSB has consolidated several of those initiatives: it took over responsibility for the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures) and the SASB standards, which are now integrated into its framework. It works in close coordination with the IASB so that financial and sustainability information are consistent.

What are the ISSB standards?

The ISSB published its first two standards in June 2023, and they took effect for financial years starting on or after 1 January 2024 (in the jurisdictions that adopt them). They are known as the IFRS Sustainability Disclosure Standards.

IFRS S1: general requirements

This is the framework standard. It sets out how to report the sustainability-related risks and opportunities that could affect a company's cash flows, access to financing or cost of capital over the short, medium and long term. It requires this information to be published alongside the financial statements and under the same logic of financial materiality. You can read more in our glossary entry on IFRS S1.

IFRS S2: climate-related disclosures

This standard focuses on climate-related risks and opportunities. It fully incorporates the TCFD structure across four pillars:

• Governance: how management oversees climate matters, disclosing information on governance.
• Strategy: the effects of physical and transition risks on the business model, supported by climate scenario analysis.
• Risk management: how those risks are identified, assessed and managed, and how they are integrated into overall management.
• Metrics and targets: this includes the obligation to report Scope 1, 2 and 3 emissions to reflect the impact across the entire value chain.

For the detail of the climate standard, see our glossary entry on IFRS S2.

Differences between the ISSB and the European CSRD

It is important not to confuse the ISSB standards with European regulation. The ISSB starts from financial materiality (how sustainability affects the value of the company), whereas the CSRD and the ESRS apply double materiality, which adds the company's impact on its environment. Both frameworks have been designed to be interoperable, so that a company can report with as little overlap as possible.

In which countries do the ISSB standards apply?

The ISSB standards are not mandatory in themselves: each country decides whether and how to adopt them. Adoption is progressing quickly. According to the IFRS Foundation, by early 2026 around 20 jurisdictions had already adopted or were using the standards (on a voluntary or mandatory basis), and more than 30 jurisdictions were in the process of bringing them into their regulatory framework. Countries where their use becomes mandatory from 2026 include Mexico, Chile and Qatar.

This convergence is one of the model's great advantages: a company with operations in several countries can rely on a common baseline rather than on different frameworks in each market.

Benefits of applying the ISSB standards

• Global standardisation: a single baseline compatible with frameworks such as GRI and with European regulation.
• Reliable information for investors: comparable data on climate-related risks and opportunities across different time horizons.
• Connection with finance: sustainability information is placed on the same level as financial information and held to the same standard.
• Access to capital: it makes it easier to engage with investors who already ask for these standards and improves reputation among clients and employees.

Frequently asked questions about the ISSB

What is the difference between IFRS S1 and IFRS S2?

IFRS S1 is the general standard for all sustainability-related risks and opportunities; IFRS S2 focuses specifically on climate and requires reporting Scope 1, 2 and 3 emissions.

Does the ISSB replace the TCFD and SASB?

Yes. The ISSB has taken over the monitoring of the TCFD recommendations and integrated the SASB standards, which remain as a sector-specific basis within its framework.

Are the ISSB standards mandatory?

Not automatically. Whether they are mandatory depends on each country incorporating them into its regulation; in several markets they already are from 2026.

If your company needs to report emissions in line with IFRS S2, a carbon footprint calculation tool that covers Scopes 1, 2 and 3 can help.