27 August, 2026
August 2026 – Where does the world stand on ISSB adoption?
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 quarterly report, we bring you the latest global developments in the uptake of the ISSB’s standards.
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.
Adoption of the standards is gaining traction: As of July 22, 2026, 35 jurisdictions have adopted the standards on a voluntary or mandatory basis. A further 11 jurisdictions are planning to adopt them in the future.
During the second quarter of 2026, several jurisdictions in the process of introducing reporting requirements published standards using the ISSB disclosures as a baseline. They include:
- Bangladesh's Financial Reporting Council adopted IFRS S1 and IFRS S2 following a consultation.
- South Korea decided to expand the scope of companies subject to ISSB-aligned reporting standards.
Other jurisdictions have launched consultations or advanced on the pathway to adopting the standards.
- New Zealand proposed issuing a new climate reporting standard, based on IFRS S2. The country already has its own climate-related reporting standards in place.
Mongolia published a roadmap for ISSB-aligned reporting to be phased in between 2026 and 2032. Also during the second quarter, Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM) removed a requirement for mandatory ISSB-related reporting by listed companies but instituted a “comply or explain” requirement. Companies that choose not to apply the ISSB standards must explain why.
In addition, in the first quarter, the ISSB outlined its plans to incorporate nature-related reporting in its disclosure standards. It also announced plans to expand its collaboration with the Global Reporting Initiative (GRI), which develops a separate suite of reporting standards. At the beginning of the second quarter, ISSB staff advised amending industry-specific standards related to the technology and communications sector.
How will the ISSB incorporate nature-related topics in its disclosure standards?
One of the biggest recent developments in the ISSB’s work is its decision on how to move forward with nature-related disclosures. Over the past year, the ISSB has discussed whether nature-related topics need their own disclosure standard or should be expanded upon in the existing two standards. The board in April 2026 decided to publish by October 2026 a draft of nature-related disclosure requirements in the form of an IFRS practice statement. Companies applying the practice statement would need to do so in conjunction with IFRS S1 and IFRS S2, but they would not be required to do so to comply with the ISSB standards. It would only be mandatory if a jurisdiction requires it.
IFRS S1 already requires nature-related disclosures, and the practice statement will explain how companies can disclose nature-related information in accordance with the existing standards. In addition, the proposed practice statement will define nature-related terms to help companies report on their nature-related risks and dependencies, the ISSB said in a staff paper.
The practice statement will include some requirements beyond the existing standards. For instance, companies would be required to conduct nature-related scenario analysis to test their resilience to nature-related risks. They would also have to disclose the amount and percentage of assets or business activities vulnerable to these risks.
The ISSB plans to draw on the work of the Taskforce on Nature-related Financial Disclosures (TNFD) to develop nature-related disclosures, and the practice statement would allow companies to use TNFD disclosure metrics for guidance, the staff paper said. The TNFD announced plans in November 2025 to complete all its current technical work, including the development of additional sector guidance, by the third quarter of 2026. This path is like 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.
How are different jurisdictions adopting the standards?
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 sign of growing convergence is New Zealand’s proposal to bring its own climate-related reporting framework, which predated the ISSB, into line with IFRS S2. Listed companies in the country with a market capitalization of more than NZ$60 billion and financial institutions with assets of more than NZ$1 billion have been subject to New Zealand's climate standard since 2023. The country’s standard setter, the External Reporting Board (XRB), received feedback from companies and investors during a 2025 request for information that they considered IFRS S2 and Australia’s AASB S2 as the most significant climate standards. In a June 30, 2026, consultation draft, the XRB noted that investors view Australia and New Zealand as a “single regional investment market and place value on comparable information across both jurisdictions.” Since AASB S2 is based on IFRS S2, the adoption of IFRS S2 would “promote a significant degree of harmonization with Australia,” the XRB said in its proposal.
However, the XRB also said it would include “locally relevant modifications” to an adoption of IFRS S2 to take into account local conditions, including “technical amendments” to reflect New Zealand’s legislative and regulatory frameworks. It also said it would adopt parts of IFRS S1 that consider climate. A standard tentatively called NZ IFRS S2 would not become mandatory until 2033.
How are global developments influencing jurisdictional adoption of the standards?
Some jurisdictions reflect a recent global trend toward simplifying or relaxing sustainability reporting. For example, Brazil was one of the early adopters of the ISSB standards and passed legislation in 2024 establishing voluntary reporting, with mandatory reporting required as of Jan. 1, 2026, with first reports expected in 2027. But in June the CVM lifted mandatory reporting requirements, moving to a “comply or explain” approach in which companies will use the ISSB standards if they do report sustainability-related information. The CVM said the amendments sought to preserve “the transparency and comparability” of reporting but also give companies the freedom to weigh the benefits of reporting against costs.
Brazil’s move comes after the EU vastly reduced the number of companies subject to sustainability reporting, citing the “administrative burden” for corporations, while the US has proposed rescinding its federal climate rules, citing unjustifiable “substantial costs.”
On the other hand, some jurisdictions are expanding the scope of companies subject to sustainability reporting as a means to protect their economies from geopolitical risks and volatile energy prices. South Korea's Financial Services Commission announced on July 8 that the country’s government had decided to move forward a previously published roadmap on ISSB adoption because of the impact of the conflict in the Middle East on energy prices.
“Effectively managing climate and energy risks has become an essential policy strategy to ensure sustainable growth for both the country and individual businesses,” the FSC said. Its roadmap lowers the threshold for companies listed on South Korea’s benchmark KOPSI index required to report from 2028 to those with consolidated assets of 10 trillion South Korean won, compared to 30 trillion South Korea won under the previous roadmap.
How is the ISSB developing its standards?
The ISSB plans to continue amending some of the industry-specific standards developed by the Sustainability Accounting Standards Board (SASB), which is now part of the IFRS Foundation. The ISSB has already proposed amendments to some industry-specific standards and is now considering amending six SASB standards related to the technology and communications sector due to the massive changes taking place in the sector with the rapid deployment of AI. A July ISSB staff paper advised further work on the SASB standards related to the sector, underlining the challenges posed by AI, new regulations on data governance and the sector’s dependence on reliable energy sources and natural resources like water and critical minerals. The paper also underlined the importance of prioritizing the sector from an investor perspective given that technology accounts for more than one-third of the S&P Global 1200.
A consultation on other proposals to amend SASB standards related to electric utilities and power generators, agricultural products and meat, poultry and dairy closed July 24, 2026. This follows amendments proposed in 2025 for eight industries in the extractives and minerals sector, plus the processed foods industry.
How is the ISSB working with other sustainability standard setters like the GRI?
Certain sustainability-related reporting frameworks like the TCFD and the Climate Disclosure Standards Board have been integrated into the ISSB, but other sustainability-related standards exist. The GHG Protocol establishes standards for reporting greenhouse gas emissions. It signed a partnership with the IFRS Foundation in 2024, and companies may use the GHG Protocol for measuring emissions.
The ISSB and the GRI announced May 26, 2026, that they are expanding their collaboration to identify common disclosures and to find ways their disclosures can be used together. The two bodies signed a memorandum of understanding in 2022 to coordinate their work on sustainability reporting and in 2024 committed to align common disclosures to prevent fragmentation. While the ISSB disclosures aim to give investors material information about a company’s sustainability risks and opportunities and their potential impact on a firm’s financial performance, the GRI standards take a more holistic approach, providing material information about a company’s impact on the economy, environment and people.
Going forward, the ISSB and the GRI said they plan to work together on the ISSB’s rollout of nature-related disclosures, taking into account the GRI’s joint work with the TNFD on aligning their disclosures. They also intend to collaborate on the GRI’s development of its sector standards and the ISSB’s work on amending the SASB standards, as well as the ISSB’s project on human capital disclosures and the GRI’s revisions of its labor-related standards.
How do the ISSB standards compare with frameworks in other jurisdictions?
The European Union’s Corporate Sustainability Reporting Directive (CSRD) requires firms to disclose standardized environmental, social and governance information, and companies in the scope of CSRD are subject to a set of sustainability standards called the European Sustainability Reporting Standards (ESRS).
Amendments vastly reducing the CSRD’s scope took effect on March 18, 2026, following a regulatory simplification drive by the European Commission. The European Commission on July 3, 2026, adopted revised ESRS, and the revised rules take seek interoperability with global sustainability reporting standards to the greatest extent possible.”
For example, when developing entity-specific disclosures, companies may use ISSB industry-based guidance, such as the SASB standards. With regards to reporting on emissions, companies may choose a financial control approach or an operational control approach when deciding what reporting boundary to apply, the amendments say, which will ensure greater alignment with “global sustainability reporting standards.”
However, the main difference between the ESRS and the ISSB standards remains firmly in place. The ESRS takes 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 only the sustainability information that could affect their current and future financial performance.
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 S.B. 253 Climate Corporate Data Accountability Act are now required to report Scope 1 and Scope 2 emissions from Nov. 10, 2026, and Scope 3 emissions from 2027. Companies reporting under the S.B. 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. The California Air Resources Board noted companies in 2025 that companies can use IFRS S2 as a framework for reporting climate disclosures. CARB said July 21, 2026, that it plans to promote interoperability with other climate-related reporting frameworks, including IFRS S2, when establishing regulations for Scope 3 emission reporting.
At the federal level in the US, the Securities and Exchange Commission on May 29, 2026, proposed rescinding federal climate disclosure rules passed in 2024, writing that the rules are “overly burdensome and costly” and “exceed the scope of the agency's statutory authority.” Removing the rules would restore “a materiality-focused approach to securities regulation,” it added. While the rules were adopted in March 2024, they were held up by lawsuits and did not go into effect. In 2025, the SEC under new leadership announced it would not defend the rules in court.