Investors worldwide, including major firms like BlackRock, Vanguard, Capital Group, and Neuberger Berman, are calling on companies to voluntarily adopt the International Sustainability Standards Board (ISSB) Standards. This move aims to provide globally comparable, decision-useful information to investors, especially in regions lacking regulatory requirements for such disclosures.
In response to this demand, the IFRS Foundation has released a new guide, ‘Voluntarily Applying ISSB Standards—A Guide for Preparers’, during New York Climate Week. The guide is designed to help companies start using the ISSB Standards voluntarily and communicate their progress to investors. With an increasing number of jurisdictions introducing sustainability disclosure requirements, the ISSB Standards serve as a global passport for meeting investor expectations.
The guide also offers detailed guidance for companies in regions without mandatory ISSB Standard requirements, helping them effectively describe their use of these standards. It complements earlier publications supporting the implementation of ‘IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information’ and ‘IFRS S2 Climate-related Disclosures’. Companies can also utilise the ESRS—ISSB Standards Interoperability Guidance to meet both investor demands and regulatory expectations worldwide.
Speaking at New York Climate Week, the recently appointed Chair of the ISSB Investor Advisory Group (IIAG), Carine Smith Ihenacho, Chief Governance and Compliance Officer, Norges Bank Investment Management said, “For sustainability information to support investment decisions, risk management processes and ownership activities across a diversified portfolio, it must be consistent and comparable across companies and over time. NBIM asks companies to use, and jurisdictions to adopt, the ISSB Standards as a global baseline. This baseline is critical for cost-effective, decision-useful reporting to investors, including in markets where disclosure requirements go further to meet the needs of other stakeholders, such as Europe.”
Jonathan Bailey, Global Head of ESG and Impact Investing at Neuberger Berman and Vice Chair of the IIAG, echoed these sentiments. He stressed the necessity of providing high-quality, comparable sustainability data to support informed investment decisions, building on the SASB Standards and TCFD recommendations.
Speaking at New York Climate Week, ISSB Chair Emmanuel Faber said, “Companies around the world already provide investors with sustainability-related information in response to investor demand. However, they use a patchwork of frameworks and standards to do so, leaving investors unable to compare the performance and prospects of companies. With many frameworks and standards now consolidated into the ISSB, the voluntary application guide helps companies navigate from their current reporting practices to applying ISSB Standards, providing a cost-effective route for companies to provide decision-useful, assurable financial information to investors.”
The ISSB Investor Advisory Group comprises 117 members from 62 leading global asset owners and managers, collectively representing over US$54 trillion in assets. The group plays a vital role in guiding the development of ISSB Standards to ensure they meet the evolving needs of global investors.
