January 2026 – Where does the world stand on ISSB adoption?

Adoption of the standards is gaining traction: As of Jan.1, 2026, 21 jurisdictions have adopted the standards on a voluntary or mandatory basis with reporting starting between Jan. 1, 2024, and Jan. 1, 2026. Rules mandating the use of the ISSB standards became effective at the start of 2026 in several jurisdictions including Chile, Qatar and Mexico. In addition, 16 other jurisdictions are planning to adopt them in the future.

How are regulators adapting the standards to their jurisdictions?

The ISSB standards take effect for corporate reporting if jurisdictions adopt them. The International Organization of Securities Commissions (IOSCO) endorsed the ISSB standards after their initial publication in 2023, signaling support for adoption in the 130 jurisdictions it represents. The organization launched a network at the end of 2024 to support its members in adopting the standards, starting with the 32 members of its Growth and Emerging Markets Committee.

Jurisdictions have taken different approaches to adopting and applying the standards, but there has been a general trend of countries aligning their standards with those of the ISSB following calls from investors for greater consistency and comparability. In some cases, individual jurisdictions are adopting IFRS S1 and/or IFRS S2 but with tweaks to fit the local market or to give local companies more time to develop their reporting abilities.

The Philippines Securities and Exchange Commission on Dec. 29, 2025, adopted its PFRS S1 and PFRS S2 standards, largely aligned with IFRS S1 and IFRS S2. The Philippines’ climate-related standard, however, gives companies an extra year before needing to report Scope 3 emissions compared with the ISSB’s standard.

China is developing standards aligned with IFRS S1 and IFRS S2 and plans to establish a nationwide framework by 2030. It is also seeking to incorporate some adaptations for the Chinese market, including using national methods to measure carbon emissions. The country’s Ministry of Finance issued a climate standard based on IFRS S2 on Dec. 25, 2025. Like the ISSB standards, it is based on four pillars of disclosure: governance, strategy, risk management, and metrics & targets. According to the Ministry of Finance, companies can use the standard voluntarily for the time being until it decides what companies would be subject to the standards.

Qatar adopted the ISSB standards as of Jan. 1, 2026, after the Qatar Financial Centre Regulatory Authority (QFCRA) set rules related to the two ISSB standards in June 2025 and the Qatar Central Bank issued a Sustainability Reporting Framework in December 2025. The standards apply to incorporated companies, banks and insurers. The Qatar Financial Centre Regulatory Authority has extended some of the transitional reliefs including Scope 3 emission disclosure for companies compared to the ISSB standards. 

How is the IFRS encouraging ISSB adoption?  

In recent months, the ISSB has consulted with investors, companies and other stakeholders to ease adoption of its standards.

On Dec. 11, 2025, the board issued amendments to its IFRS S2 climate-related disclosures standard following a comment period that ended on June 27, 2025. The amendments include removing some types of Scope 3 emissions from the reporting requirements; allowing commercial banks or insurers to use alternative industry-classification systems other than the Global Industry Classification Standard (GICS) in disclosing disaggregated financed emissions as required under current rules; allowing companies to use other ways of measuring GHG emissions than the GHG Protocol Corporate Standards if a company’s jurisdiction requires a different method; and granting financial institutions relief from measuring and disclosing Scope 3 emissions associated with derivatives, investment banking (facilitated emissions) and insurance and reinsurance underwriting.

The amendments will take effect as of Jan. 1, 2027, but companies may apply them earlier if they wish.

How do the standards compare with key frameworks in other jurisdictions?

In December 2025, EU lawmakers agreed to reduce the scope of the Corporate Sustainability Reporting Directive (CSRD), which requires firms to disclose standardized environmental, social and governance information. The agreement drastically reduces the number of companies subject to the directive and follows proposals by the European Commission to ease the reporting burden for firms. 

Companies in the scope of CSRD are subject to a set of sustainability standards called the European Sustainability Reporting Standards (ESRS). Both the ISSB and the European Financial Reporting Advisory Group (EFRAG), a technical advisor to the European Commission that develops the ESRS, had previously published guidance to support companies in applying both sets of standards and to demonstrate how they align. 

As part of the EU’s simplification drive, EFRAG on Dec. 3, 2025, submitted draft amendments to the ESRS to the European Commission. One of the aims of the revision is to bring the EU standards more in line with global reporting standards Like IFRS S1 and IFRS S2.

EFRAG said the draft amendments build on “a very high level of interoperability already achieved.”  It noted, however, that some of the reliefs in the ESRS go beyond those of ISSB standards, and companies would have to take that into account if they were also seeking to comply with the ISSB standards.

A key difference between the ESRS and IFRS S1 and IFRS S2 is that the ESRS take a double materiality approach, which considers both a company’s internal value creation and its external impact on the environment and society, whereas the ISSB standards require companies to disclose sustainability information that could affect their current and future financial performance.

While the revised ESRS would not change that materiality approach, EFRAG said  its draft amendments clarify reporting of financial materiality and bring its standards more in line with those of the ISSB.

Faber said in the ISSB’s December 2025 podcast that the ISSB welcomed EFRAG’s work on achieving increased interoperability. “There has been progress on that front, and we will be engaging closely with the European Commission as these ESRS are being finalized into a delegated act in the coming months,” he said. 

In the US, California approved two state laws in October 2023 that would require large companies to disclose on climate exposure. Companies reporting under California’s SB-253 Climate Corporate Data Accountability Act are required to report Scope 1 and Scope 2 emissions from Aug. 26, 2026, and Scope 3 emissions from 2027. Companies reporting under the SB-261 Climate-related Financial Risk Act were required to publish their first climate-related financial risk report by Jan. 1, 2026, and then every two years after that, but implementation has been put on hold following a court injunction. On Nov. 18, 2025, CARB noted companies can use IFRS S2 as a framework for reporting climate disclosures.

At the federal level in the US, the Securities and Exchange Commission’s climate disclosure rules published in March 2024 have not gone into effect, though they have not been formally rescinded. The SEC told a US court on July 23, 2025, that it did not intend to review or defend the rules "at this time." The court put cases against the rule on hold on Sept. 12, 2025, and said it is the SEC's responsibility to determine whether the initial rules will be rescinded, repealed, modified or defended in litigation.

The rules required SEC-registered companies 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 were required to disclose Scope 1 and Scope 2 GHG emissions if the companies deem those emissions to be material. The SEC acknowledged at the time there were “similarities” between the ISSB standards and its final rules but said it would not recognize the ISSB standards as an alternative reporting regime.

What can we expect from the ISSB in 2026?

Following the ISSB’s announcement in November 2025 to focus on nature, the board is planning to prepare an exposure draft of new disclosure requirements in in time for the UN’s COP17 biodiversity conference in October 2026. The decision follows research undertaken by the ISSB on risks and opportunities related to biodiversity, ecosystems and ecosystem services (BEES) to decide whether it needed to amend its existing standards to include nature-related risks and opportunities, introduce new standards or provide fresh guidance.

ISSB Chair Emmanuel Faber said during the ISSB’s December 2025 podcast that the research had demonstrated “real investor demand for information” about nature. He said investors are seeking information about the interconnections and interdependencies between nature and climate change, especially when it comes to assessing nature dependency risks for companies. This risk represents how companies rely on ecosystem services as well as whether those services are vulnerable to disruption — interrupting business operations in turn.

Most of the world's largest companies are significantly dependent on nature in their operations even as the biodiversity and ecosystems underpinning those resources are declining due to land use change, overexploitation and climate change. S&P Global Sustainable1 data shows that 57% of companies in the S&P Global 1200 — an index that covers the 1,200 largest companies across North America, Europe, Asia, Australia and Latin America — have a significant nature dependency risk across their direct operations.

The ISSB will build on the work of the TNFD to create new nature-related standards, as more than 730 companies already use them. The TNFD has said it will complete all its current technical work, including the development of additional sector guidance, by the third quarter of 2026. This path is similar to the one taken by the Taskforce on Climate-related Financial Disclosures (TCFD), which handed over monitoring of climate disclosures to the ISSB after IFRS S1 and IFRS S2 were published. The ISSB’s work on climate standards drew on the TCFD as a foundation.

In the ISSB's November 2025 podcast, ISSB Vice Chair Sue Lloyd said the ISSB plans to draw on the TNFD’s recommendations, which require companies to disclose nature-related information on their governance, strategy, risk and impact management, and metrics and targets, and its  LEAP approach, which is designed to help companies identify and assess nature-related risks. LEAP stands for locate, evaluate, assess and prepare. The nature standard will also build on IFRS S1, which requires companies to disclose all sustainability-related risks and opportunities.

The ISSB has yet to decide whether to create a new standard, to issue amendments to the two existing standards, or to publish guidance on nature-based disclosures, Faber said on the November 2025 ISSB podcast. He encouraged market participants to use the TNFD framework when assessing nature-related topics as it would help them in reporting according to IFRS S1.

The board is also continuing its research on human capital with a view toward standard setting, amid investor demand for information on this topic, Lloyd said in December 2025. She noted the board is further ahead in its research work on nature as it has the TNFD framework to build on.

Industry-specific standards

In 2026, the ISSB is also planning to issue amendments to certain industry-specific standards, subject to stakeholder feedback. The ISSB in 2025 proposed amending some of the Sustainability Accounting Standards Board (SASB) standards.  SASB is now part of the IFRS Foundation, and its standards form an integral part of the ISSB’s standards for industry-specific disclosures. The amendments relate to standards for eight industries in the extractives and minerals sector, plus the processed foods industry. The ISSB published a separate consultation at the same time on proposed amendments to industry-based guidance on implementing IFRS S2.

The proposals aim to improve alignment with other sustainability-related standards and frameworks, including those of the Global Reporting Initiative and the TNFD; amend disclosure topics and metrics in the SASB standards related to biodiversity, ecosystems and ecosystem services and human capital to align them with the ISSB’s research on these topics; and bring the language and concepts of SASB standards more in line with those of IFRS S1 and IFRS S2.

In early 2026, the board is also planning to publish draft amendments for three additional SASB standards — one regarding electric utilities and power generators and two relating to the food and beverage sector.