Jurisdictions representing more than half of the global economy are now aligning with ISSB standards according to the IFRS Foundation – with China the latest adherent to the framework.
The findings appear in the foundation’s inaugural Jurisdictional Guide (pdf) which aims to help jurisdictions design and plan their journeys, and how others are delivering ‘globally consistent and comparable sustainability-related information.’
The foundation said more than 20 jurisdictions have either decided, or are taking steps, to use ISSB standards in their legal or regulatory frameworks. This adds up to almost 55% of global GDP (gross domestic product), more than 40% of global market capitalisation, and more than half of global greenhouse gas emissions.
Earlier this week (May 27), China’s Ministry of Finance announced the release of a draft guideline aimed at unifying corporate sustainability disclosures. The wider goal is to establish a nationwide standard by 2030, with the draft guideline setting ‘general requirements for… disclosures’.
“The draft formulates the unified China Sustainability Disclosure Standards based on ISSB standards, drawing on the beneficial experiences of ISSB standards, aligning with China’s context and showcasing Chinese characteristics,” the IFRS Foundation noted.
The European Union is a notable adherent, with the Corporate Sustainability Reporting Directive (CSRD) regulation establishing that the European Sustainability Reporting Standards (ESRS) would ‘incorporate ISSB standards to the greatest extent possible’, as IFRS put it. Earlier this month, the IFRS Foundation and EFRAG, creator of the ESRS standards, published guidance to support organisations, particularly regarding practical support for companies applying both.
Read next: The ISSB Standards: A primer for businesses of all sizes
The United States remains something of a holdout, however. In March, the Securities and Exchange Commission (SEC) adopted new climate disclosure rules. The IFRS claims that, while the SEC ‘acknowledged similarities’ with the ISSB standards, the commission ‘declined at this time to recognise the standards for use as an alternative’ to its own disclosure rules.
The milestone was announced at the annual IOSCO (International Organization of Securities Commissions) meeting, with IOSCO having endorsed the ISSB standards in July. Jean-Paul Servais, IOSCO chair, said he was ‘encouraged’ at the progress made since then.
“Today marks an important milestone in IOSCO’s objective to establish a global framework for comparable reliable sustainability disclosures for the capital markets,” added Servais.
Meanwhile, another move towards interoperability within standards was announced this week (May 24) in the form of a collaboration between IFRS and the Global Reporting Initiative (GRI). The partnership will ‘optimise how GRI and ISSB standards can be used together’ to help reporting on organisations’ impacts, risks and opportunities. The move builds upon the Memorandum of Understanding the two bodies signed in 2022.
