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

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.

• IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information: Companies are required to disclose sustainability-related risks and opportunities.
• IFRS S2 Climate-related Disclosures: Companies are required to disclose specific metrics such as greenhouse gas (GHG) emissions, climate-related physical and transition risks and scenario analysis.

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.

A case in point is South Korea. The Korea Sustainability Standards Board (KSSB) in February 2026 issued two sustainability-related disclosure standards: KSDS 1, its general requirement standard, and KSDS 2, its climate-related disclosure standard, both based on the ISSB standards. It had contemplated the creation of a third country-specific standard that would have permitted companies to “selectively” disclose additional sustainability-related information as required by domestic laws or to meet sustainability-related policy objectives. However, the KSSB said it decided not to issue the third standard “considering changes in the government policy environment and the potential burden on companies.”

Japan, on the other hand, has issued a third standard as it has divided IFRS S1 into two different standards — the General Standard for disclosures of sustainability-related risks and opportunities and the Application Standard with requirements for sustainability-related financial disclosures. Japan’s Financial Services Agency in February 2026 mandated the disclosures for listed companies.

The Sustainability Standards Board of Japan (SSBJ) on March 31 published a document outlining the differences between the Japanese standards and the ISSB’s, noting that the SSBJ had decided to incorporate all the requirements of the ISSB standards and, in addition, to add jurisdiction-specific alternatives that companies can choose to apply should they deem necessary.

Companies can also choose to use SSBJ alternatives in lieu of the ISSB standards. For example, the ISSB standards require companies to disclose the amount and percentage of assets or business activities vulnerable to climate-related physical and transition risks. The SSBJ requires companies to disclose either on either the percentage of their assets or business activities exposed to physical and transition risks or the “magnitude” of assets or business activities vulnerable to such risks, which the SSBJ says may give a more faithful representation of a company’s risks.

The SSBJ also added some requirements that are not included in the ISSB standards. It requires companies to disclose disaggregated Scope 3 emissions, which are the emissions throughout a company’s value chain, across the 15 categories set out in the GHG Protocol Corporate Value Chain Standard. IFRS S2 requires companies to disclose which of 15 categories are included in its Scope 3 disclosures.

The UK is adopting the ISSB standards with some changes. It issued two sustainability reporting standards, UK SRS S1 and UK SRS S2, based on IFRS S1 and IFRS S2, on Feb. 25, 2026. The UK said it had decided to allow voluntary reporters to use waivers indefinitely regarding non-climate sustainability reporting and disclosure of Scope 3 emissions. Under IFRS S2 companies can take an extra year to disclose Scope 3 emissions. The standards are currently voluntary. However, the UK financial regulator, the Financial Conduct Authority, in January 2026 proposed aligning its current climate disclosure rules for listed companies with UK SRS S1 and UK SRS S2 and making them mandatory for listed companies from Jan. 1, 2027.

How is the IFRS encouraging ISSB adoption?

The IFRS issued amendments to IFRS S2, the climate-related disclosures standard, in December 2025, and on March 10, 2026, it published guidance for companies on using the standard. In the guidance, the ISSB said that IFRS S2 requires companies to assess their climate resilience so that investors can understand the potential implications of climate risks on a company’s strategy and business model and how a company intends to adapt to climate risks over the short, medium and long term. Companies have to use scenario analysis to inform the resilience assessment and disclose how and over what time period they conducted the analysis, the guidance said. They must assess their climate resilience on an annual basis but are not required to update their scenario analysis annually, the ISSB explained.

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

On Feb. 24, 2026, EU government ministers gave the final green light to reduce the scope of the Corporate Sustainability Reporting Directive (CSRD), which requires firms to disclose standardized environmental, social and governance information following proposals by the European Commission to simplify the EU’s sustainability reporting framework.

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 other global frameworks like IFRS S1 and IFRS S2, for example, in the treatment of anticipated financial effects and related exemptions.

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 closer to those of the ISSB.

In the US, California approved two state laws in October 2023 that would require large companies to disclose their 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. 10, 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 was put on hold following a court injunction. Companies are allowed to issue the reports voluntarily. 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 require 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 throughout 2026?

Following the ISSB’s announcement in November 2025 to focus on nature, the board is planning to publish draft requirements and guidance for nature-related reporting in time for the UN’s COP17 biodiversity conference in October 2026.

The nature disclosure guidance would complement IFRS S1 and IFRS S2 as the standards already require companies to provide material information on nature-related risks and opportunities, the ISSB said. The guidance would explain how companies could disclose nature-related information in accordance with the existing standards, it said.

In an April 2026 staff paper, the IFRS recommended that the ISSB create the nature disclosure requirements in the form of an IFRS Practice Statement, which would not be mandatory by design. Individual jurisdictions could still mandate application of the nature disclosure requirements, however.

The ISSB plans to draw on the work of the Taskforce on Nature-related Financial Disclosures (TNFD) to develop nature-related disclosures. 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 Task Force 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.

Industry-specific standards

In 2026, the ISSB is also planning to issue amendments to certain industry-specific standards, subject to stakeholder feedback. On March 26, 2026, the board 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 three industries: electric utilities and power generators; agricultural products; and meat, poultry and dairy. This follows amendments proposed in 2025 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.