ISSB Guide: Requirements, Who Reports, and What Changed from TCFD

What Are the ISSB Standards?

The International Sustainability Standards Board (ISSB) is the standard-setting board of the IFRS Foundation that writes IFRS Sustainability Disclosure Standards. It has issued two: IFRS S1, which covers general requirements for disclosing sustainability-related financial information, and IFRS S2, which covers climate. Both were issued on June 26, 2023 and apply to annual reporting periods beginning on or after January 1, 2024. They ask a company to disclose the sustainability and climate risks and opportunities that could reasonably be expected to affect its cash flows, access to finance, or cost of capital, organised under the same four pillars the TCFD used: governance, strategy, risk management, and metrics and targets.

The ISSB cannot require anyone to report. It writes standards, and national regulators decide whether to adopt them, when, and for whom.

The effective date in the standards is not a compliance deadline for any company. It is the date from which a jurisdiction adopting the standards can require them. IFRS S2 is designed to be applied alongside IFRS S1, though a first-year relief allows climate-only reporting, and most adopting jurisdictions have taken that climate-first route and extended it.

Key Facts at a Glance

What Is the ISSB, and Where Does TCFD Fit?

The Financial Stability Board created the Task Force on Climate-related Financial Disclosures in 2015, and its 2017 recommendations became the template for corporate climate reporting worldwide. The four pillars, eleven recommended disclosures, and the framing of climate as a financial risk rather than a corporate responsibility topic all originate there, and these elements survive intact in IFRS S2.

The IFRS Foundation announced the ISSB at COP26 in November 2021 to put an enforceable global baseline underneath that architecture. It absorbed the Value Reporting Foundation in 2022, which brought the SASB Standards and the Integrated Reporting Framework with it, and issued IFRS S1 and IFRS S2 in June 2023.

In July 2023 the Financial Stability Board announced that the TCFD's work was complete, describing the ISSB standards as the culmination of it, and asked the IFRS Foundation to take over monitoring of companies' climate-related disclosures. The TCFD disbanded in October 2023 having done what it was set up to do. The IFRS Foundation published its first monitoring progress report in November 2024.

ISSB vs TCFD: What Is the Difference?

The IFRS Foundation's position is that a company applying IFRS S1 and IFRS S2 meets the TCFD recommendations, because the four pillars and eleven recommended disclosures are fully incorporated. The reverse is not true. A TCFD report is not an IFRS S2 report, and the gap is a set of specific, mostly quantitative requirements that TCFD either encouraged without requiring or did not address.

Connectivity with financial statements. IFRS S1 requires sustainability disclosures to cover the same reporting entity and the same period as financial statements, use consistent data and assumptions, and be published at the same time.

Scope 3 disclosure. IFRS S2 requires an entity to consider all 15 GHG Protocol categories and disclose the measurement approach, inputs and assumptions behind the figure it reports. It cannot restrict measurement to the minimum boundaries the GHG Protocol describes.

Quantified financial effects. Naming a transition risk is not enough. IFRS S2 asks what that risk does to the balance sheet and the cash flows, this year and in future years, in numbers unless the company can show a quantitative estimate is not available or the effects are not separately identifiable.

Industry-based metrics. IFRS S2 points reporters to the industry disclosure topics and metrics in its Industry-based Guidance, which derives from the SASB Standards.

Where Do the SASB Standards Fit?

The SASB Standards identify the sustainability topics most likely to affect financial performance in 77 industries, and each topic comes with metrics. The ISSB has owned them since 2022 and maintains and enhances them.

IFRS S1 requires an entity to refer to and consider the applicability of the SASB Standards when identifying sustainability-related risks and opportunities and the metrics it discloses, and IFRS S2 does the same for the industry-based disclosure topics and metrics in its Industry-based Guidance. A company can conclude that a given SASB metric is not applicable, but it has to have looked.

The ISSB amended the SASB Standards in December 2023 to remove references tied to US regulation and US GAAP so that they work in any jurisdiction, and it issued consequential amendments to the financed emissions metrics in three SASB Standards alongside the December 2025 IFRS S2 amendments.

The UK changed the SASB references from "shall refer to and consider" to "may refer to and consider" in UK SRS S1 and S2, which makes the industry-based work optional for UK reporters. No other large adopter has made the same change. Our UK SRS guide covers the UK version in detail.

What Changed in 2026

Adopted and in force

• China's exchange rules produced their first reports. Listed constituents of the SSE 180, STAR 50, Shenzhen 100 and ChiNext indices, plus dual-listed companies, filed sustainability reports covering calendar year 2025 by April 30, 2026.
• Australia's first cohort reported. ASIC confirmed on May 18, 2026 that 259 sustainability reports had been lodged as at May 6, 2026 for periods ending December 31, 2025 under AASB S2.
• Hong Kong's LargeCap requirements became mandatory for financial years beginning on or after January 1, 2026.

Adopted but not yet in force

• The UK published UK SRS S1 and UK SRS S2 on February 25, 2026. They are available for voluntary use. Mandatory application for listed companies depends on FCA rules that are still in consultation.
• Japan made SSBJ standards mandatory by ordinance. Cabinet Office Ordinance amendments promulgated on February 20, 2026 and July 15, 2026 set the application timetable for Tokyo Stock Exchange Prime Market companies.
• Korea finalised its roadmap on July 8, 2026, and expanded it well beyond the February 2026 draft.
• Taiwan endorsed IFRS S1 and IFRS S2 on November 12, 2025, with the first cohort reporting in 2027.
• The ISSB issued amendments to IFRS S2 on December 11, 2025, effective for periods beginning on or after January 1, 2027 with early application permitted. They let an entity limit scope 3 Category 15 to financed emissions, allow classification systems other than GICS for disaggregating financed emissions, clarify the jurisdictional relief from the GHG Protocol where only part of an entity is required to use a different method, and add a jurisdictional relief from using global warming potential values from the latest IPCC assessment report.

Still in progress

• The FCA's CP26/5 was published on January 30, 2026 and closed on March 20, 2026. A policy statement is expected in autumn 2026, with rules proposed to apply to accounting periods beginning on or after January 1, 2027.
• New Zealand consulted on replacing its TCFD-derived NZ CS standards with an IFRS S2-based standard, available for early adoption from October 1, 2026 and mandatory from January 1, 2033. The consultation closes September 30, 2026.
• The ISSB began work on a standard covering biodiversity, ecosystems and ecosystem services, decided in December 2025.
• Brazil went the other way. CVM Resolution 244, published May 29, 2026, revoked the obligation that Resolution 193 had created before it took effect, replacing it with comply-or-explain from January 1, 2027.

Who Has to Report Under ISSB Standards?

Nobody, by virtue of the standards alone. IFRS S1 and IFRS S2 create no legal obligation anywhere. The obligation comes from the jurisdiction that adopts them, and each one sets its own scope, timetable, reliefs and assurance requirements.

Companies can ask themselves three questions to understand their obligations:

1. Where are we listed, incorporated, or licensed? Most adoptions apply to listing status or to financial regulation, not to where a company operates.
2. What size are we by that jurisdiction's test? Thresholds range from market capitalisation tiers in Japan and Korea, to revenue and asset tests in Singapore and Australia, to paid-in capital in Taiwan.
3. Which version of the standard applies? Türkiye adopted IFRS S1 and IFRS S2 unchanged. Almost everyone else extends transition reliefs, defers scope 3, or starts with climate only.

Which Countries Have Adopted ISSB Standards?

As of the IFRS Foundation's jurisdictional adoption tracker, last updated July 16, 2026, 25 jurisdictions have finalised profiles and 13 have preliminary snapshots. IFRS Foundation staff put the total taking steps toward adoption at 40 as of February 26, 2026.

Africa

Americas

Asia and Asia-Pacific

Middle East & Europe

What Do You Have to Disclose?

IFRS S2 outlines four pillars:

Governance. The bodies and individuals responsible for oversight, their terms of reference and mandates, how those responsibilities appear in job descriptions and policies, how the body ensures the right skills are available, and how often it is informed.

Strategy. The climate risks and opportunities that could reasonably be expected to affect prospects, over what time horizons, and where in the business model and value chain they concentrate. The current and anticipated effects on financial position, financial performance and cash flows. Transition plans and how they will be resourced. A climate resilience assessment using scenario analysis, with the scenarios, inputs, assumptions and timing all disclosed.

Risk management. The processes used to identify, assess, prioritise and monitor climate risks and opportunities, including data sources, the scope of operations covered, whether climate scenarios inform risk identification, and whether those processes changed from the prior period.

Metrics and targets. Absolute gross scope 1, scope 2 and scope 3 emissions in CO2 equivalent, measured under the GHG Protocol Corporate Standard unless a jurisdictional authority requires another method, and disaggregated between the consolidated accounting group and other investees. Location-based scope 2, plus information on contractual instruments. All 15 scope 3 categories considered, with the measurement approach, inputs and assumptions disclosed, and financed emissions for asset managers, commercial banks and insurers. Industry-based metrics. Amount and percentage of assets or business activities vulnerable to transition and physical risks and aligned with climate opportunities. Capital deployed toward climate risks and opportunities. Internal carbon price and how it is applied. Whether climate performance affects executive remuneration. Targets, how they were set, whether a third party validated them, and the planned use of carbon credits.

If the emissions inventory is not already organised by scope with an auditable trail behind each figure, that work comes first. Our guide to scope 1, 2 and 3 emissions covers the boundaries.

What Transition Reliefs Are Available in the First Year?

IFRS S1 and IFRS S2 provide first-year reliefs, and adopting jurisdictions extend them. Check the national instrument to understand which reliefs apply to you.

• Climate first. Report only climate-related information under IFRS S2 in the first annual reporting period, applying IFRS S1 only as it relates to climate.
• Comparatives. No comparative information required for the first annual reporting period.
• Timing. Publish sustainability disclosures after financial statements in the first year instead of alongside them.
• Scope 3. Not required in the first annual reporting period in which IFRS S2 is applied.
• Measurement method. Continue using an existing GHG measurement method other than the GHG Protocol Corporate Standard for one year where one was already in use.

Assurance

Assurance requirements are set by the jurisdiction, not the ISSB. Where it has been specified, the pattern is limited assurance first, phased in a year or two after first disclosure and applied to scope 1 and 2 before anything else.

Whatever standard the assurance provider works to, the considerations are the same: can each figure be traced back to source evidence, with the calculation method and emission factor versions documented? Companies that fail a first limited assurance engagement almost always fail on the evidence trail rather than on the number itself.

How to Prepare

1. Determine which jurisdictions apply to you. List every market where the company is listed, incorporated, or holds a financial licence. Check each against that jurisdiction's own test, not the ISSB standard.
2. Align the sustainability reporting calendar to the financial one. IFRS S1 requires the same entity, the same period, and simultaneous publication. Where the sustainability report currently appears months after the annual report, that gap has to close, and closing it requires a different data collection cadence.
3. Close scope 1 and 2 first, to an auditable standard. Every jurisdiction starts here and every assurance phase-in starts here. Automate utility and fuel data collection, document the emission factor set and its version, and attach supporting evidence to each data point as it is collected rather than reconstructing it before the audit.
4. Build the scope 3 screen even where scope 3 is deferred. IFRS S2 requires all 15 categories to be considered, not all 15 to be material. A documented screen that shows which categories were assessed and why some were excluded is what the deferral period is for. Waiting until scope 3 is due leaves no time to engage suppliers.
5. Run the industry-based metrics check. Pull the SASB Standards for your industry and the IFRS S2 Industry-based Guidance, and record which topics and metrics apply. This is a requirement in most adopting jurisdictions and it changes what data you need to collect.
6. Build the inventory once and export it many times. A company facing Japan's SSBJ, Singapore's SGX rules and California SB 253 is not measuring three different things. It is exporting one emissions inventory into three formats with different boundaries, deadlines and assurance levels.

How Do ISSB Standards Compare to CSRD, California, and CDP?

ISSB asks what climate does to the company. CSRD and the ESRS, on the other hand, ask both what sustainability does to the company and what the company does to people and the environment. The EU has not adopted ISSB standards, though the ISSB, EFRAG and European Commission services published interoperability guidance in May 2024 showing that an ESRS climate reporter has a short list of additional points to address to also comply with IFRS S2. Our CSRD guide covers the scope of CSRD after Omnibus I.

California's SB 253 asks for verified scope 1, 2 and eventually scope 3 emissions, and there is no governance narrative, scenario analysis, or financial-effects disclosure. It is a narrower ask than IFRS S2. California's SB 261 is where the ISSB standards appear: it requires a climate-related financial risk report, and a company can satisfy it by reporting to the 2017 TCFD recommendations or to IFRS S2. The Ninth Circuit enjoined SB 261 on November 18, 2025 and CARB is not enforcing it for now, though the voluntary submission window stays open through December 31, 2026. Our California climate disclosure guide covers both laws.

CDP is a questionnaire scored by a third party rather than a regulatory filing, and it has restructured around IFRS S2 and the ESRS so that the same data serves all three.

The boundaries, audiences, and deadlines differ. The emissions inventory underneath does not. A company that measures once against a defensible boundary, documents the method and factor versions, and keeps evidence attached to each data point can satisfy multiple reporting obligations from the same numbers. Our guide to choosing a climate disclosure framework maps the landscape.

How Gravity Helps You Report Under ISSB-Based Rules

There are three ways to do this work: in-house, with a consultancy, or with software. Gravity is an integrated energy and carbon management platform that combines software, expert support, and a vendor network.

• Automated data collection. Utility bill scanning and utility APIs handle large document volumes across sites and subsidiaries without manual entry, which is what makes scope 1 and 2 defensible at the level assurance providers test first. Supplier engagement and survey tooling collects the value chain data that scope 3 requires but bills never contain.
• One inventory, many exports. The platform formats collected data to disclosure requirements, so a single inventory supports an IFRS S2 filing in one jurisdiction, an ESRS climate disclosure in the EU, a California SB 253 submission, and a CDP response, without rebuilding the underlying data each time.
• An evidence trail built as you go. Data logs, supporting evidence attached to each data point, and centralised documentation mean the audit trail exists when the assurance engagement starts rather than being assembled in the weeks before it. Gravity does not provide assurance. It makes the data assurable and the verification workflow manageable.
• Energy and emissions in the same place. Energy consumption and cost data surface efficiency opportunities ranked by return, and a trusted vendor network shortens implementation, which produces the progress narrative that transition plan disclosures require.
• Expert assistance. Every customer works with a dedicated Climate Strategist who helps interpret how a given regime applies, including the judgment calls ISSB adoption raises: which jurisdictional tests the group meets, which transition reliefs the national instrument grants, and which SASB industry topics apply.

Talk to an expert about what ISSB-based reporting means for your group.