IOSCO endorses the ISSB’s Sustainability-related Financial Disclosures Standards

IOSCO has taken a significant step towards achieving consistent, comparable, and reliable sustainability information by endorsing the sustainability-related financial disclosures standards recently issued by the ISSB, known as IFRS S1 and IFRS S2. This endorsement follows a comprehensive and independent review of the final ISSB Standards, which IOSCO engaged in over the past two years.
The endorsement signifies IOSCO’s belief that the ISSB Standards are well-suited to serve as a global framework for capital markets, supporting the use of sustainability-related financial information in capital raising and trading. Additionally, they help financial markets accurately assess relevant sustainability risks and opportunities. IOSCO urges its 130 member jurisdictions, which regulate over 95% of the world’s financial markets, to consider adopting, applying, or being informed by the ISSB Standards within their jurisdictional arrangements. This move aims to promote consistent and comparable climate-related and other sustainability-related disclosures for investors.
IOSCO also published a Technical Assessment Report (see Chapter 2 of the attached PDF). This report provides a background to IOSCO’s engagement with the IFRS Foundation on sustainability-related corporate reporting and summarizes the conclusions of the endorsement assessment of the ISSB Standards. The assessment of the ISSB Standards for endorsement used five dimensions, including completeness, consistency, and comparability of sustainability-related information; principles, frameworks, and standards; topic scope and materiality; narrative disclosures and quantitative metrics; and linkage between sustainability issues and business strategy/financial implications.
IOSCO hence concluded that the ISSB Standards serve as an effective and proportionate global framework for investor-focused disclosures concerning climate-related matters (IFRS S2) and sustainability-related information in general (IFRS S1). These standards are deemed appropriate for helping globally integrated financial markets accurately assess sustainability risks and opportunities. They also provide a foundation for a robust assurance framework for such disclosures.
IOSCO underlines that its endorsement of the ISSB Standards does not imply endorsement of any other standards referred to in those standards.