ISSB

What it means

The International Sustainability Standards Board (ISSB) is a standard-setting board under the IFRS Foundation, the same body that oversees the IASB for IFRS Accounting Standards. It was created to develop a global baseline of investor-focused sustainability-related financial disclosures, and issued its first two standards, IFRS S1 and IFRS S2, in June 2023. It also took over monitoring of climate-related disclosures from the TCFD.

Why it matters

The ISSB uses single (financial) materiality: sustainability matters that affect enterprise value. That focus is what distinguishes it from the EU's double-materiality approach under the ESRS. Groups reporting in both worlds can reuse much of the same underlying data.

How it relates to nearby concepts

ISSB standards are designed to interoperate with the ESRS; the difference is the materiality lens. The board's output is IFRS S1 and S2.

Common misunderstandings

• ISSB standards and the ESRS are the same: They are different frameworks: ISSB uses investor-focused single materiality; ESRS uses double materiality.
• The ISSB replaced IFRS Accounting Standards: It is a separate sustainability board under the same IFRS Foundation, not a replacement for the accounting standards.