The ISSB aims to create a unified set of global standards for sustainability disclosures to help organizations report on their environmental, social, and governance (ESG) performance in a consistent and transparent manner. This helps investors, stakeholders, and the public make informed decisions and assessments of an organization's sustainability practices.
The overarching goal of the ISSB in regards to sustainability disclosure standards is to develop standards that are cost-effective, decision-useful, and market-informed. This means creating standards that provide valuable information for decision-making while being efficient and affordable for companies to implement.
Sustainability factors are becoming a mainstream part of investment decision-making. In recent years, sustainability considerations have gained significant importance in the investment world. Investors are increasingly incorporating environmental, social, and governance (ESG) factors into their decision-making processes. This mainstreaming of sustainability factors reflects a broader recognition of the impact of ESG issues on financial performance and risk management.
The ISSB standards are developed in collaboration with other sustainability reporting initiatives. This collaborative approach aims to ensure that the standards are comprehensive and align with global sustainability reporting needs.
The ISSB is aiming to address a fragmented landscape of voluntary, sustainability-related standards and requirements. It intends to harmonize and simplify sustainability reporting by creating globally recognized standards, making it easier for companies to provide consistent sustainability information.
The ISSB was formed due to strong market demand. As the importance of sustainability and environmental, social, and governance (ESG) factors in investment and decision-making has grown, there has been a significant demand for standardized and consistent sustainability disclosures. The ISSB was established to address this demand by creating a unified global framework for sustainability reporting to meet the information needs of investors, companies, and other stakeholders.
The reporting initiatives that have influenced the development of the ISSB's standards include the Climate Disclosure Standards Board (CDSB), Task Force for Climate-related Financial Disclosures (TCFD), Value Reporting Foundation’s Integrated Reporting Framework, and industry-based SASB Standards. These initiatives have contributed to shaping the ISSB's approach to sustainability reporting standards.
The ISSB is building upon the work of market-led investor-focused reporting initiatives. It leverages existing efforts and standards that are geared towards meeting the information needs of investors and enhancing the quality and relevance of sustainability reporting.
The benefit of a company applying the ISSB's standards is avoiding double-reporting. By adhering to globally recognized standards, companies can provide comprehensive sustainability information that is recognized by various stakeholders, reducing the need for multiple, jurisdiction-specific reports.
The key focus of the ISSB standards is providing comprehensive sustainability disclosures focused on the needs of investors and the financial markets. These standards aim to enhance the quality and comparability of sustainability information for the benefit of investors and the broader financial community.
These organizations collaborate with the ISSB to develop comprehensive sustainability reporting standards.
