A new IFRS Foundation report reveals that more than 1,000 companies have begun referencing International Sustainability Standards Board (ISSB) standards in their reports, with 30 jurisdictions moving towards incorporating these standards into regulatory frameworks. The report, presented to the Financial Stability Board (FSB), highlights significant progress in aligning with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations—a responsibility the IFRS Foundation assumed after the TCFD disbanded in 2023.
While 82% of companies report on at least one of the TCFD’s 11 recommendations, only 3% comply with all, often omitting crucial data on climate-related governance, strategy, and metrics. This information gap may limit investors’ ability to fully assess climate-related risks.
The shift from recommended to mandated disclosures, especially following the International Organization of Securities Commissions (IOSCO) endorsement of the ISSB standards in July 2023, is set to increase the availability of critical sustainability data for global capital markets. Insights into the 30 jurisdictions progressing towards ISSB-based regulations reveal key trends:
Scope 3 GHG Emissions: Nearly all jurisdictions include Scope 3 GHG requirements, seeing value in these emissions disclosures.
Industry-Specific Reporting: 28 jurisdictions plan to include industry-specific requirements, with most making these mandatory.
Broad Sustainability Focus: Most jurisdictions are preparing to expand disclosures beyond climate to include all sustainability-related risks.
The IFRS report also emphasizes the importance of the SASB Standards, now integrated into the ISSB framework as a global baseline, to improve comparability and reduce reporting burdens for companies with cross-border operations. The findings underscore a growing commitment to standardized, actionable sustainability information across global markets.
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