How the world is adapting to the ISSB Standards

ABOUT NOSSA DATA

In addition to providing ESG Reporting Software to corporates such as Vodafone, PostNL, PensionBee, and more, Nossa Data has been providing thought leadership around regulatory changes, including implications from the CSRD / ESRS, IFRS, and previous versions of the CSDDD.

‍

BLOG

The ISSB's first two sustainability standards, effective from Jan. 1, 2024, aim to establish a consistent global sustainability disclosure framework. As of March 13, 2024, five jurisdictions have adopted the standards, with 11 others planning to do so. Notably, Canada and Australia are at various stages of adoption.

‍

The standards, IFRS S1 and IFRS S2, require companies to disclose sustainability-related risks and opportunities, including specific climate-related metrics like GHG emissions and climate-related risks.

‍

The ISSB was established by the IFRS Foundation to create standardised reporting rules, building upon existing frameworks like the TCFD. The IFRS is now overseeing companies' climate-related disclosures, gaining greater oversight.

‍

Regulators are adopting the standards differently, ranging from mandatory to voluntary reporting, with varying timelines and scopes.

‍

The EU's CSRD and the SEC's recent climate-disclosure standards have similarities with the ISSB standards but are not recognised as alternatives. The EU's ESRS and SEC's rule expand reporting requirements, emphasising environmental, social, and governance impacts and risks.

‍

The IFRS has issued a preview guide to assist regulators in adopting the standards, emphasising transparency and urging regulators to consider local circumstances and this guide can be found here: https://www.ifrs.org/content/dam/ifrs/supporting-implementation/adoption-guide/preview-of-the-jurisdictional-adoption-guide.pdf 

‍

To learn more about the ISSB (IFRS S1 and S2), click here: https://www.nossadata.com/blog/issb 

‍

Jurisdictions that have adopted ISSB standards:

‍

Costa Rica:

Costa Rica adapted the standards on a voluntary basis starting Jan. 1, 2024. They will transition to mandatory status for publicly listed companies under the supervision of Costa Rica's financial regulator, Consejo Nacional de Supervisión de Sistema Financiero, from 2026 for the fiscal year 2025 and for companies classified as large taxpayers from 2027 for the fiscal year 2026.

‍

Brazil:

Brazil adopted the standards as of Jan. 1, 2024, with plans for mandatory implementation from Jan. 1, 2026. The Ministry of Finance and the securities regulator, Comissão de Valores Mobiliários (CVM), announced this decision on Oct. 20, 2023.

‍

Nigeria:

Nigeria embraced the standards as of Jan. 1, 2024, initially on a voluntary basis until 2026. Mandatory reporting will be phased in starting from 2027. The country's Financial Reporting Council launched the ISSB standards on June 26, 2023, in collaboration with the ISSB and the Nigerian stock exchange. A consultation on the adoption roadmap concluded on March 14, 2024.

‍

Turkey:

Turkey adopted the standards in 2024. They will be obligatory for companies fulfilling two out of three criteria consistently for two reporting periods: assets exceeding 500 million Turkish lira, annual net revenues of over one billion Turkish lira, and more than 250 employees. This decision was announced by Turkey's Public Oversight, Accounting, and Auditing Standards Authority during the 28th UN Climate Change Conference in 2023.

‍

Bangladesh:

Bangladesh's central bank issued guidelines for banks and financial institutions to implement ISSB standards starting Jan. 1, 2024.

‍

Jurisdictions with plans to adopt the ISSB standards:

‍

Canada:

Canada aims to adopt the standards voluntarily from Jan. 1, 2025. The Canadian Sustainability Standards Board initiated a consultation on March 13, 2024.

‍

United Kingdom:

The UK aims to adopt UK-specific standards based on the ISSB standards by July 2024. Listed companies with more than 500 employees and large non-listed companies with annual revenues exceeding £500 million have been mandated to disclose since 2022 based on the Taskforce on Climate-related Financial Disclosures.

‍

India:

India's central bank published a draft framework on ISSB standards for banks and financial institutions on Feb. 28, 2024, planning adoption for 2025.

‍

Republic of Korea:

The Republic of Korea plans adoption post-2026. The Financial Services Commission postponed the adoption of standards from 2025 to after 2026.

‍

Japan:

The Sustainability Standards Board of Japan plans to issue draft guidelines in March 2024, with final standards expected no later than March 31, 2025.

‍

Hong Kong:

The Hong Kong Stock Exchange plans to adopt standards in 2025 for listed companies, with financial regulators working on a roadmap for financial services.

‍

Taiwan:

Taiwan aims to adopt standards in 2026 following the Financial Supervisory Commission's roadmap announcement on Aug. 17, 2023.

‍

Philippines:

The Philippines plans to adopt standards in 2024, with listed companies expected to report in 2025 for the 2024 financial year.

‍

Singapore:

Singapore's Accounting and Corporate Regulatory Authority and Singapore Exchange Regulation announced ISSB-related reporting requirements on Feb. 28, 2024, to be mandatory for listed companies between 2025 and 2027.

‍

Malaysia:

Malaysia plans adoption from 2025, with main market listed companies implementing between 2025 and 2026, and companies listed on Malaysia's ACE high-growth market and non-listed large companies with annual revenues of 2 billion ringgit or above from 2027 to 2028.

‍

Australia:

Australia plans to adopt standards effective July 1, 2024, with different implementation timelines based on annual revenues.

‍

Other jurisdictions with related disclosure standards:

‍

United States:

The US Securities and Exchange Commission finalised its climate-related disclosure rules on March 6, 2024, with submission requirements starting from fiscal year 2025 for large accelerated filers.

‍

European Union:

The EU adopted European Sustainability Reporting Standards to comply with the Corporate Sustainability Reporting Directive, showing alignment with ISSB standards.

‍

New Zealand:

New Zealand's External Reporting Board adopted climate-related disclosure standards in 2023, with ongoing review scheduled until December 2025.

‍

source