International Sustainability Standards Board (ISSB)
- Roger Pay
- Aug 28
- 9 min read
International Sustainability Standards Board (ISSB)
The International Sustainability Standards Board (ISSB) is an independent, private-sector body that develops and approves IFRS Sustainability Disclosure Standards (IFRS SDS). It was established in November 2021 by the IFRS Foundation at the UN Climate Change Conference (COP26) in Glasgow.
Purpose and Functions
The main purpose of the ISSB is to create a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and financial markets. The key functions and objectives of the ISSB include:
Developing Global Standards: The ISSB develops standards to provide a consistent and transparent framework for companies to report on sustainability-related risks and opportunities. This helps to address the fragmentation in sustainability reporting and allows for greater comparability across global markets.
Meeting Investor Needs: The standards are designed to provide decision-useful information to investors, lenders, and other creditors, helping them to assess a company's financial performance and value in the context of sustainability factors.
Creating a Global Baseline: The ISSB aims to establish a global baseline of sustainability disclosures that jurisdictions can build upon with their own specific requirements. This allows for interoperability between the ISSB standards and other jurisdictional or broader stakeholder-focused disclosures.
Consolidating Existing Initiatives: The ISSB's work builds on and consolidates existing investor-focused reporting initiatives, such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) standards. This aims to simplify the reporting landscape for companies.
Ensuring Connectivity: The ISSB works in close cooperation with the International Accounting Standards Board (IASB) to ensure that its sustainability standards are compatible with IFRS Accounting Standards, which are also set by the IFRS Foundation. This creates a link between financial and sustainability reporting.
IFRS Sustainability Disclosure Standards (IFRS SDS)
In June 2023, the ISSB issued its first two standards:
IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information: This standard provides the overarching framework for companies to report on all material sustainability-related risks and opportunities.
IFRS S2, Climate-related Disclosures: This standard requires companies to disclose information about climate-related risks and opportunities, aligning with the recommendations of the TCFD.
These standards are based on the concept of "financial materiality," which means companies must disclose information about sustainability matters that are likely to have a material impact on their financial performance.
The International Sustainability Standards Board (ISSB) is a rapidly evolving body, and its influence on global sustainability reporting is expanding. Here's a more detailed look at its current status and recent developments:
Global Adoption and Momentum
Since the ISSB issued its first two standards, IFRS S1 and IFRS S2, in June 2023, there has been significant global momentum toward their adoption. The IFRS Foundation, which oversees the ISSB, reported in June 2025 that 36 jurisdictions have either adopted the standards or are in the process of introducing them into their regulatory frameworks. These jurisdictions collectively represent a significant portion of the global economy and market capitalization.
Major jurisdictions that have adopted or are in the process of adopting ISSB standards include:
Brazil: Has already incorporated the standards into its legal framework, with mandatory reporting beginning in 2026.
Canada: The Canadian Sustainability Standards Board (CSSB) is developing proposals for Canadian standards based on the ISSB standards.
European Union (EU): While the EU has its own Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), there is a strong focus on ensuring interoperability and alignment with the ISSB standards.
Hong Kong: The Hong Kong Stock Exchange has aligned its new climate-related disclosure requirements with IFRS S2, with a "comply or explain" basis for some companies starting in 2025.
Japan: The Sustainability Standards Board of Japan (SSBJ) has issued exposure drafts for its standards, which incorporate all ISSB requirements and are expected to be applied to companies listed on the Tokyo Stock Exchange's Prime Market.
Malaysia: Has a phased approach to adoption, with Main Market-listed issuers required to fully adopt the climate disclosure standard by the financial year ending December 31, 2027.
Singapore: The Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation are implementing mandatory climate-related disclosure requirements aligned with the ISSB standards for listed companies and large non-listed companies.
United Kingdom: The UK has launched a consultation on its own sustainability-related standards based on those of the ISSB.
The ISSB's approach is to provide a "global baseline" that jurisdictions can build upon. This means that while many countries are fully aligning with the standards, some are also adding jurisdiction-specific requirements to address local needs.
Updates to the Standards and Future Work
The ISSB is not resting on its laurels. It is actively working on new projects and providing guidance to support the implementation of its inaugural standards.
SASB Standards Enhancement: The ISSB has begun a comprehensive review of the industry-specific Sustainability Accounting Standards Board (SASB) standards, which were incorporated into the ISSB's work. The goal is to align the SASB standards more closely with the language and concepts of IFRS S1 and S2. This process involves issuing exposure drafts for various industries, such as extractive and processed foods sectors.
Implementation Support: The ISSB is focusing on providing educational materials and support to companies as they adopt the new standards. It is addressing practical challenges that have been identified, particularly in areas like the measurement of Scope 3 greenhouse gas emissions. In fact, the board is considering proposed amendments to IFRS S2 to address some of these implementation challenges.
Future Agenda: The ISSB has a strategic plan for its future work, which includes a focus on topics beyond climate. It is currently investigating standards for biodiversity and ecosystems, as well as human capital. This reflects the ISSB's commitment to creating a comprehensive set of standards for all material sustainability-related risks and opportunities.
Key Considerations and Challenges
Despite the rapid progress, there are still some key considerations and challenges:
Interoperability: While many jurisdictions are aligning with the ISSB, there are still differences, particularly with the EU's CSRD. The ISSB is working with bodies like EFRAG (which develops the ESRS) to ensure a high level of interoperability and minimize the reporting burden for companies operating in multiple regions.
Capacity Building: For many companies, especially in emerging markets, adopting these new standards requires significant resources and expertise. The ISSB is working to provide support and tools to help companies navigate the transition.
Assurance: The issue of assurance—or the independent verification of sustainability data—is an important and evolving topic. Different jurisdictions have varying requirements for assurance, which can impact the comparability and credibility of reported information.
In summary, the ISSB is a powerful force driving the convergence of financial and sustainability reporting. With its inaugural standards now effective, the focus is on widespread global adoption, ongoing refinement of the standards, and the development of new standards to address a broader range of sustainability topics.
Implementation Costs for Companies
It's important to note that the costs associated with implementing the ISSB standards can vary significantly based on a company's size, industry, geographic location, and its current level of sustainability reporting maturity. While there are no hard numbers for every company, we can provide typical fee structures and a range of potential costs for each category.
1. Consultancy Fees
This is often one of the largest initial costs, as many companies lack the in-house expertise to conduct a thorough gap analysis and build an implementation plan.
Fee Structure: Fees are typically based on a project scope or a daily/hourly rate. Some consultants also offer retainer models.
Typical Costs:
Hourly Rates: Can range from $100 to over $500 per hour, with senior consultants from major firms commanding the highest rates.
Daily Rates: A more common model for larger projects. Rates can be anywhere from $500 to $2,000+ per day, depending on the consultant's seniority.
Project-Based Fees: For a mid-sized company with a moderately complex value chain, a full ISSB implementation roadmap project could cost anywhere from $30,000 to well over $150,000. For a large, multinational corporation, these fees could easily reach six figures or more.
2. Assurance Fees
As ISSB reporting becomes more mainstream, assurance is seen as critical for building trust. Assurance fees are comparable to those for financial statement audits, and are often based on the complexity and scope of the sustainability data being verified.
Fee Structure: Fees are typically fixed for a specific assurance engagement, though they can be based on a daily rate for the auditing team.
Typical Costs:
Initial Assurance: The first assurance engagement is often the most expensive, as the auditors must review all new processes and data collection methods. This can range from $20,000 to over $100,000, with large, complex organizations paying significantly more.
Ongoing Assurance: Once a company has established robust processes, the annual assurance fees may be lower, but still substantial. They can be anywhere from $15,000 to $75,000+ per year, depending on the scope of the engagement.
3. Technology and Software Fees
Sustainability reporting software can streamline data collection and management, but it comes at a cost. Many vendors offer subscription-based models.
Fee Structure: Fees are typically a monthly or annual subscription, often tiered based on company size, number of users, and the specific modules or features required (e.g., carbon accounting, biodiversity, etc.).
Typical Costs:
Small to Medium Enterprises (SMEs): Subscriptions can start from $500 to $1,500 per month.
Large Enterprises: For comprehensive, enterprise-level platforms, annual subscriptions can range from $30,000 to well over $100,000. Some specialized platforms or custom implementations can even exceed six figures.
4. Internal Training and Staff Costs
This is often an overlooked but substantial cost. It includes the time spent by internal employees on training, data collection, and report preparation.
Fee Structure: This is primarily an internal cost, though external training programs have associated fees.
Typical Costs:
External Training Programs: A one-day workshop on ISSB standards can cost anywhere from $500 to $2,000 per participant. Subsidies and grants are sometimes available from government agencies or industry bodies to help offset these costs.
Internal Staff Time: This is the most significant cost. The time a company's finance, sustainability, and operational teams spend on learning the standards, collecting data, and preparing the reports can amount to thousands of hours, especially in the first year. For a large company, this can be equivalent to hiring a full-time employee or more.
5. Data Collection Costs
For certain disclosures, especially those related to the value chain, companies may need to pay for external data or services.
Fee Structure: Can be project-based, subscription-based, or per-unit of data.
Typical Costs:
Scope 3 Emissions Data: Many companies use third-party databases or services to calculate their Scope 3 emissions. This can be a significant recurring cost, ranging from $5,000 to $50,000+ annually, depending on the complexity of the supply chain.
Life Cycle Assessments (LCAs): If a company needs to perform an LCA for a product, it may hire a consultant, with costs ranging from $10,000 to $50,000+ per study.
How Bestar can Help
The implementation of the International Sustainability Standards Board (ISSB) standards is a significant and complex undertaking for many organizations. The new requirements go beyond traditional financial reporting and demand a deep integration of sustainability and financial data, processes, and governance. For this reason, many companies, especially those without a dedicated, in-house sustainability team, are turning to professional services to help them navigate the transition.
Bestar offers a wide range of services to assist with ISSB adoption. Our services fall into the following key areas:
1. Gap Analysis and Strategic Planning
A crucial first step is to understand the current state of an organization's sustainability reporting and what needs to be done to meet the ISSB's requirements. Professional services help by:
Conducting a Gap Analysis: We compare the company's existing sustainability reporting practices against the requirements of IFRS S1 and IFRS S2. This identifies what information is missing, what data needs to be collected, and what systems or processes need to be established or improved.
Performing a Materiality Assessment: The ISSB standards are based on "financial materiality." Bestar helps companies conduct a thorough assessment to identify the sustainability-related risks and opportunities that are most likely to affect their enterprise value, which in turn determines what they must disclose.
Developing an Implementation Roadmap: Based on the gap analysis, we create a phased plan for adoption, considering the company's specific timeline, resources, and jurisdictional requirements. This helps to make the transition manageable and efficient.
2. Data and Technology Infrastructure
Reporting under the ISSB standards requires robust data collection, management, and reporting systems. Professional services can assist with:
Data Collection and Management: We help companies identify the data points needed for disclosure, establish new data collection processes, and ensure the accuracy and reliability of the data. This is particularly critical for areas like Scope 3 greenhouse gas emissions, which can be complex to measure.
Technology Solutions: Bestar offers or recommends technology platforms and software solutions designed to streamline sustainability reporting. These tools can automate data gathering, centralize data, and generate reports in the required format, improving efficiency and accuracy.
Connecting Financial and Sustainability Data: We help bridge the gap between financial and sustainability teams, ensuring that the sustainability disclosures are integrated with and consistent with the company's financial statements.
3. Governance and Internal Controls
The ISSB standards place a strong emphasis on governance and internal controls to ensure the quality and reliability of the disclosed information. Bestar helps by:
Establishing Governance Structures: We advise on setting up appropriate governance frameworks, including defining roles and responsibilities for the board, management, and various committees (e.g., audit and sustainability committees) in overseeing sustainability reporting.
Developing Internal Controls: We help design and implement internal controls and procedures to ensure the accuracy and completeness of sustainability data. This is essential for building trust and confidence in the reported information and preparing for future assurance requirements.
4. Assurance and Verification
While not yet mandatory in all jurisdictions, independent assurance of sustainability disclosures is expected to become a key component of the ISSB's framework. Bestar provides:
Readiness Assessments: We help companies prepare for a future assurance engagement by assessing their reporting processes and controls, identifying potential weaknesses, and recommending improvements.
Assurance Services: Bestar can perform independent verification of a company's sustainability reports, enhancing their credibility for investors and other stakeholders.
5. Training and Capacity Building
ISSB reporting requires new skills and knowledge, particularly for finance and accounting professionals. Bestar offers:
Training and Workshops: We provide training to company personnel on the ISSB standards, the concept of financial materiality, and the practical aspects of data collection and reporting.
Knowledge Transfer: We work alongside a company's internal teams to build their long-term capacity to manage and report on sustainability matters independently.
By leveraging the expertise of Bestar, companies can navigate the complexities of ISSB implementation, ensure compliance with new regulations, and create high-quality, reliable sustainability disclosures that meet the needs of a global investor base.
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