Global Economy Shifts Towards ISSB Sustainability Standards Adoption

The IFRS Foundation has announced significant progress in global adoption of the International Sustainability Standards Board’s (ISSB) standards, with jurisdictions representing over half of the global economy by GDP moving to align their sustainability disclosure standards with ISSB’s guidelines. This milestone was highlighted with the release of a Jurisdictional Guide at the IOSCO Annual Meeting to support regulators.

Over 20 jurisdictions are either adopting or considering measures to ensure global comparability in climate and sustainability-related disclosures based on ISSB Standards. These jurisdictions collectively account for nearly 55% of global GDP, more than 40% of global market capitalization, and over half of global greenhouse gas emissions.

The European Union was an early adopter, integrating ISSB Standards into its Corporate Sustainability Reporting Directive. Recently, China’s Ministry of Finance issued an Exposure Draft of Chinese Sustainability Disclosure Standards, aligning them with ISSB Standards while incorporating local characteristics.

Other jurisdictions that have taken steps to use ISSB Standards represent around 75% of global market capitalization excluding the United States. Although the US SEC has acknowledged the ISSB Standards, it has not yet integrated them into its rules, opting instead to observe the standards’ application in other regions.

The IFRS Foundation has released the Inaugural Jurisdictional Guide to assist jurisdictions in adopting or using ISSB Standards. This guide outlines various approaches to adoption, including full and partial adoption, and permission to use. The Foundation’s Regulatory Implementation Programme will offer tools, educational materials, and capacity-building resources to support jurisdictions in their transition.

The African Development Bank (AfDB) and IFRS Foundation signed an agreement to enhance sustainability disclosure practices in Africa through capacity building and technical assistance. This partnership underscores the IFRS Foundation’s commitment to supporting ISSB Standards implementation globally.

IOSCO Chair Jean-Paul Servais remarked, “Today marks an important milestone in establishing a global framework for comparable reliable sustainability disclosures. The ISSB’s Inaugural Jurisdictional Guide will support jurisdictions on their journey towards adoption or use of the Standards.”

IFRS Foundation Trustees Chair Erkki Liikanen emphasized the complementary roles of regulators and standard-setters, highlighting the importance of integrating ISSB Standards into regulatory frameworks to enable accurate pricing of climate and sustainability-related risks and opportunities in capital markets.