The Standards will provide an invaluable baseline for individual countries to adopt, helping reporters to provide investors with globally consistent and reliable information from which they can make investment decisions.
The two Standards, S1 and S2, are designed to be used together. S1 is focussed on general sustainability topics, [if judged material through the application of the materiality principle], while S2 is climate-focussed, bringing TCFD under its wing. Further standards covering other topics are also expected.
As the Standards are designed to disclose investor-related information some companies may want to show linkages to other frameworks such as the GRI Standards. In this sense, they provide a note of differentiation to the EU’s forthcoming CSRD, which targets a broader audience.
![](/data/News_views/issb_standards2.jpg)
A familiar structure
The structure of both Standards will look familiar, as they borrow the TCFD’s approach of dividing information across the four categories of governance, strategy, risk management and metrics and targets.
The climate-focussed Standard S2, is in fact remarkably similar to TCFD but with more granularity, meaning that listed UK reporters will find they already comply with many of the requirements.
![](/data/News_views/issb_standards4.jpg)
Regional adoption
Time will tell how individual countries may adapt the Standards to local needs, or when they will adopt them. The UK government has committed to incorporating the Standards into its new Sustainability Disclosure Requirements (SDRs) but hasn’t yet given a date for these. The ISSB is initially planning for the Standards to be used from 2024, with in-scope companies publishing their first reports from 2025.
The ISSB also proposes ‘transition relief’ and a staged approach to adopting the Standards, recommending that the climate-focused S2 Standard, is adopted a year before the more general S1 Standard.
Companies who want to get ahead can start by mapping the Standards’ disclosure requirements against their current reporting to identify any gaps. More information is available at the ISSB knowledge hub.
If you would like advice on adopting the Standards or improving your reporting, we would love to hear from you.
![](/data/News_views/tcfd_article_feb_20234.jpg)