ISSB Sets Out Draft Sustainability Standards, 6-Point Plan

An article in FM Financial Management, posted by Oliver Rowe March 31, 2022, says that the International Sustainability Standards Board’s launched consultation was coupled with a six-point plan to build on SASB standards development.

The two draft standards, [Draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and [Draft] IFRS S2 Climate-related Disclosures, says Rowe, build upon the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and incorporate industry-based disclosure requirements derived from SASB standards, the ISSB said.

Emmanuel Faber, ISSB chair, said that governments, policymakers, and the private sector rarely "align behind a common cause." He added: "However, all agree on the importance of high-quality, globally comparable sustainability information for the capital markets. "These proposals define what information to disclose, and where and how to disclose it. Now is the time to get involved and comment on the proposals."

The exposure draft for general reporting requirements:

  • Would require an entity to disclose material information about all the significant sustainability-related risks and opportunities to which it is exposed.
  • Includes proposed requirements and guidance to support the disclosure of material information about significant sustainability-related risks and opportunities not specifically addressed by an IFRS sustainability disclosure standard.
  • Would require an entity to explain the connections between different pieces of information, including between various sustainability-related risks and opportunities and information in the entity's financial statements.
  • Would require disclosure of sustainability-related financial information as part of, i.e., at the same time as, the entity's general-purpose financial reporting.


The proposed climate-related disclosure standard would require an entity to provide information that enables financial reporting users to understand:

Governance. This would include the governance processes, controls, and procedures an entity uses to monitor and manage climate-related risks and opportunities.

Strategy. This would include the climate-related risks and opportunities that could enhance, threaten, or change an entity's business model and strategy over the short, medium, and long term.

Risk management. This would include how climate-related risks and opportunities are identified, assessed, managed, and mitigated by an entity.

Metrics and targets. This would include the metrics and targets used to manage and monitor an entity's performance in relation to climate-related risks and opportunities.

In its plan, also published March 31, the ISSB described how it will build on the SASB standards and embed SASB's industry-based standards development approach into its own standards development process. The ISSB will:

  • Take an industry-based approach to standards development.
  • Include SASB standards in the two published exposure drafts.
  • Commit to improving international applicability of SASB standards.
  • Use SASB standards as the starting point for the ISSB's industry-based requirements.
  • Transition the SASB's ongoing projects to the ISSB and continue them.
  • Encourage preparers and investors to continue to use the SASB standards in this transition phase.

For more information on this important development, see ISSB sets out draft sustainability standards, 6-point plan - FM (