International Sustainability Standards Board
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The International Sustainability Standards Board (ISSB) is a standard-setting body established in 2021-2022 under the IFRS Foundation, whose mandate is the creation and development of sustainability-related financial reporting standards to meet investors' needs for
sustainability reporting Sustainability reporting refers to the disclosure, whether voluntary, solicited, or required, of non-financial performance information to outsiders of the organization. Generally speaking, sustainability reporting deals with information concerning e ...
.


Background

In principle, sustainability-related disclosures have always been at least potentially part of financial reporting, given financial risks associated with sustainability matters. In practice, however, they have not always been a priority of the accounting and financial reporting community. With growing awareness of sustainability challenges and especially
climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to ...
, the need for a specific framework for sustainability-related disclosures has been increasingly recognized both among
environmentalist An environmentalist is a person who is concerned with and/or advocates for the protection of the environment. An environmentalist can be considered a supporter of the goals of the environmental movement, "a political and ethical movement that se ...
s and within the financial industry.


CDSB, IIRC, SASB, VRF

The Climate Disclosure Standards Board (CDSB) was formed in 2007 in London as part of the Carbon Disclosure Project that started in 2002. The International
integrated reporting Integrated reporting (IR, or in International Integrated Reporting Council publications) in corporate communication is a "process that results in communication, most visibly a periodic “integrated report”, about value creation over time. A ...
committee (IIRC) was formed in London in August 2010 with the participation of several stakeholders including the
Global Reporting Initiative The Global Reporting Initiative (known as GRI) is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human righ ...
, International Accounting Standards Board, U.S. Financial Accounting Standards Board,
International Organization of Securities Commissions The International Organization of Securities Commissions (IOSCO) is an association of organizations that regulate the world's securities and futures markets. Members are typically primary securities and/or futures regulators in a national jurisdic ...
, and
International Federation of Accountants The International Federation of Accountants (IFAC) is the global advocacy organization for the accountancy profession; mainly for the financial accounting and auditing professions. Founded in 1977, IFAC has more than 175 members and associates i ...
. Separately, the Sustainability Accounting Standards Board (SASB) was created in 2011 in
San Francisco San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17th ...
in the context of U.S. securities disclosures. In June 2021, the IIRC and SASB announced their combination to form the Value Reporting Foundation (VRF).


Creation and early development

The creation of the ISSB was announced at the 2021 United Nations Climate Change Conference (
COP26 The 2021 United Nations Climate Change Conference, more commonly referred to as COP26, was the 26th United Nations Climate Change conference, held at the SEC Centre in Glasgow, Scotland, United Kingdom, from 31 October to 13 November 2021. The ...
) in
Glasgow Glasgow ( ; sco, Glesca or ; gd, Glaschu ) is the most populous city in Scotland and the fourth-most populous city in the United Kingdom, as well as being the 27th largest city by population in Europe. In 2020, it had an estimated popul ...
in November 2021. Simultaneously, the IFRS Foundation announced it would consolidate the VRF and CDSB with the ISSB by June 2022. The IFRS Foundation announced the appointment of
Emmanuel Faber Emmanuel Faber (born 22 January 1964) is a French businessman. He was formerly the Chief Executive Officer of Danone, and the Chairman of the Board of directors. He was subsequently appointed Chair of the International Sustainability Standards Bo ...
as ISSB Chair in December 2021, and of Sue Lloyd as ISSB Vice-Chair in January 2022. In late March 2022, the ISSB published its first two exposure drafts, respectively on climate and general sustainability-related financial disclosures. In addition to the IIRC and SASB teams based respectively in London and San Francisco, the ISSB is developing staff resources in
Frankfurt Frankfurt, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...
, where its Chair and Vice-Chair are based, and
Montreal Montreal ( ; officially Montréal, ) is the second-most populous city in Canada and most populous city in the Canadian province of Quebec. Founded in 1642 as '' Ville-Marie'', or "City of Mary", it is named after Mount Royal, the triple ...
. The ISSB is expected to become fully functional in the course of 2022.


Standards

ISSB standards will be part of the broader body of
International Financial Reporting Standards International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's f ...
(IFRS) and are to be known as IFRS-S ("S" for sustainability) to distinguish them from the accounting standards issued by the ISSB's sister body, the International Accounting Standards Board.


See also

* Task Force on Climate Related Financial Disclosures *
Sustainability standards and certification Sustainability standards and certifications are voluntary guidelines used by producers, manufacturers, traders, retailers, and service providers to demonstrate their commitment to good environmental, social, ethical, and food safety practices. Th ...


References

{{Reflist Sustainability organizations International sustainability organizations International Financial Reporting Standards