June 2025 – 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.

The board is also continuing its work on developing the Sustainability Accounting Standards Board (SASB) standards and is planning consultations on proposed amendments throughout 2025, with the first kicking off on July 3. SASB is now part of the IFRS Foundation, and its standards form an integral part of the ISSB’s standards for industry-specific disclosures. For example, IFRS S2 guidance on industry-specific climate-related metrics is based on the SASB standards, according to the ISSB. The proposed amendments have been drafted under the assumption that companies would apply the SASB standards in conjunction with the ISSB standards. The IFRS Foundation is seeking to prevent any duplication between the SASB standards and IFRS S1 and IFRS S2.

On June 18, 2025, the board ratified drafts of its amendments to nine of the 77 industry-specific SASB standards and plans to publish them in July 2025 with a 150-day comment period. Five of the standards are related to coal operations; construction materials; iron and steel producers; metals and mining; and processed foods. Four standards are related to the oil and gas sectors. The amendments are designed to ensure the SASB standards better align with those of the ISSB; that they can be applied internationally, including to value chains in emerging markets and developing economies, where information on value chains may be lacking; to improve the interoperability of the standards with other global frameworks, while considering investors’ needs in terms of disclosure; and to take into account the ISSB’s research on topics like biodiversity and human capital. The amendments include revising the GHG emissions and air quality disclosure topics and related metrics, among other things.

The ISSB expects the amendments to be effective 12 to 18 months after they are issued, and companies will be allowed to apply them earlier than their effective date.

The ISSB is planning to publish drafts of amendments to three other SASB standards in the fourth quarter of 2025: electric utilities and power generators; agricultural products; and the meat, poultry and dairy industries. The ISSB decided to publish these three drafts later in 2025 to gather more information from stakeholders in emerging markets and developing economies about these specific industries in their jurisdictions. In the third quarter of 2025, the ISSB plans to decide whether to consider further amendments to other SASB standards.

What guidance is the IFRS giving on ISSB adoption?

The board has also been developing how it can reinforce transition planning into the standards after taking responsibility for transition planning from the UK’s Transition Plan Taskforce in 2024 as part of an effort to harmonize transition plan disclosures globally.

On June 23, 2025, the ISSB published guidance on how companies should consider transition plans when reporting under IFRS S2, the climate-related reporting standard. Although IFRS S2 does not require companies to have a transition plan, it does require them to provide material information on climate-related risks and opportunities, including how they are mitigating and adapting to climate-related transition and physical risks.

The guide outlines ways of embedding transition planning within a company’s strategy. It explains that companies should disclose whether they have a strategy for the transition to a low-carbon economy, including adjusting business models to make them more resilient to climate-related physical risks. It also sets out guidance on what metrics and targets to use, as well as examples of what kinds of information certain sectors should report.

The ISSB has been rolling out further guidance on different topics to steer companies and jurisdictions on applying the standards. For example, on May 29, 2025, it published educational materials to guide companies on GHG emissions disclosure under IFRS S2. The guidance includes information about whether companies need to disclose GHGs on a gross basis and whether an entity must set targets under IFRS S2. It also explains what steps companies need to take to disclose emissions under the disclose GHG emissions according to the GHG Protocol Corporate Standard. The guide also explains how companies can use the standard’s Scope 3 measurement framework to measure their Scope 3 emissions, which are those that occur up and down their value chain. Under IFRS S2, companies are required to disclose specific metrics such as GHG emissions, climate-related physical and transition risks and scenario analysis.

How are regulators adapting the standards to their jurisdictions?

Ultimately, the standards only take effect for corporate reporting if jurisdictions adopt them. The International Organization of Securities Commissions (IOSCO) endorsed the ISSB standards a month after their initial publication, 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 is a general trend of countries aligning their standards with those of the ISSB following calls from investors for greater consistency.

The UK is one example of a country adapting its existing standards to align with the ISSB. In the UK, disclosures had been required for certain companies based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, but the UK government is now updating its rules to reference the ISSB standards. The UK government published on June 25, 2025, draft UK-specific standards based on the ISSB standards, and a consultation runs to Sept. 17, 2025.

IFRS S1 allows companies in their first year of reporting to publish sustainability reports separately from their financial reports, but the UK standards would require companies to report both their financial statements and sustainability reports at the same time given that some UK companies already report according to the TCFD. Companies subject to the UK standards will also have a two-year delay to report all climate-related risks and opportunities, including Scope 3 emissions, instead of a one-year delay under IFRS S2. Companies are also not obliged to report using the SASB standards. In addition, the draft standards do not set any dates for reporting, with effective dates to be set out in “relevant legislation or regulation.”

Another jurisdiction considering aligning its existing climate disclosure standards with the ISSB’s is New Zealand. Since Jan. 1, 2023, certain large, listed companies and financial institutions have been subject to New Zealand’s standards, which are based on the TCFD recommendations. The country’s standard-setting body, the External Reporting Board (XRB), held a consultation in the second quarter of 2025 to inform whether increased alignment with the ISSB would better achieve the objectives of New Zealand’s climate reporting framework. While there is a “strong degree of alignment” between its standards and those of the ISSB, the XRB said differences in detail meant an entity applying the IFRS S2 climate standard would not comply with the XRB’s standards. Furthermore, the ISSB standards are more prescriptive, while the New Zealand standards are more flexible, the XRB said.

How do the ISSB standards compare with those in other jurisdictions such as the EU?

The EU widened the reach of its sustainability reporting regulations for companies through the reform of its Non-Financial Reporting Directive to create the Corporate Sustainability Reporting Directive (CSRD), which has been phased in from Jan. 1, 2024, but has since been delayed as part of an effort to simplify EU sustainability reporting rules. Companies in the scope of CSRD are subject to a set of sustainability standards called the European Sustainability Reporting Standards (ESRS).

The ISSB published inoperability guidance in May 2024 in conjunction with the European Financial Reporting Advisory Group (EFRAG), a technical advisor to the European Commission, to support companies in applying both sets of standards and to demonstrate to what extent both sets of standards align.

The European Commission’s Omnibus Simplification Package, proposed on Feb. 26, 2025, would drastically reduce the number of companies in scope of the CSRD and simplify the ESRS, which could have implications for the alignment of the ISSB standards and the ESRS. EFRAG said on June 20, 2025, it is aiming for a 50% reduction in the number of data points required by the ESRS. In a progress report, EFRAG said its work would “enhance the already very high degree of interoperability with global sustainability reporting standards.”

In the US, the Securities and Exchange Commission’s climate disclosure rules published in March 2024 appear unlikely to go into effect. In March 2025, then-Acting SEC Chairman Mark Uyeda said in a press release the SEC is stepping back from defending its climate disclosure rules in ongoing litigation against the rules, which had been paused shortly after they were finalized to allow legal challenges to proceed. Uyeda and Paul Atkins, who was sworn in as the new chairman of the SEC in April, have both criticized the climate rules as an overreach of the SEC’s powers that creates unnecessary reporting burden on businesses.

The rules, which have yet to be formally rescinded but remain stayed, 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 are 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 for the time being.

Predating the SEC rule, California approved a state law in October 2023 that would require large companies doing business in the state to begin reporting Scope 1 and Scope 2 emissions in an annual report starting in 2026, with Scope 3 reporting beginning in 2027. An amendment to the law signed in September 2024 gave the California Air Resources Board (CARB) more flexibility in developing the reporting rules companies will follow to comply with the law but did not change the compliance dates for emissions reporting. CARB announced on Dec. 5, 2024, that it would “exercise its enforcement discretion” in the first year of reporting to allow companies more time to prepare for the new rules.

What future standards is the ISSB considering?

The board is continuing its research on risks and opportunities related to biodiversity, ecosystems and ecosystem services (BEES) as well as human capital. The research will include defining how macroeconomic drivers, impacts and dependencies, risks and opportunities, financially affect companies; identifying gaps between investor needs and current disclosures; prioritizing the most relevant topics; determining relevant risks and opportunities and whether they warrant cross-industry or industry-specific requirements. The board will also take into account stakeholder feedback on the SASB standards related to BEES and human capital.

Part of the work on BEES will explore building on the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), which launched in June 2021 to guide  companies in disclosing their dependencies and impacts on nature. The board will assess what disclosures companies are providing and how much it costs them; how to apply IFRS S1 to nature-related disclosures; and whether investors’ needs are met by disclosures under the TNFD.

The research project on BEES comes as the ISSB and TNFD are developing a closer relationship. On April 9, 2025, they announced a memorandum of understanding whereby they will share knowledge and expertise to develop the ISSB’s research on BEES and the nature-related aspects of the SASB standards.

The ISSB is planning to share its research findings periodically over the coming months. The ISSB will then evaluate whether to develop new thematic or industry-based standards, amend existing standards, develop new guidance, undertake a combination of all three or take no action.