The global sustainability disclosure landscape is fragmented and in flux. This is problematic because the fast pace of changing regulatory requirements adds uncertainty for businesses already under acute economic pressures. Business leaders hungry for clarity and direction face an alphabet soup of sustainability disclosure standards that require time and attention to understand exactly what applies to where.

Investor pressure

Faced with a regulatory pick-and-mix across jurisdictions, investors and key stakeholders are increasingly calling for an aligned, global set of sustainability reporting standards and disclosures to provide consistent, reliable and decision-ready information. The response from the International Financial Reporting Standards (IFRS®) Foundation, a not-for-profit, public interest organisation established to develop high-quality, understandable, enforceable and globally-accepted accounting and sustainability disclosure standards, has emerged in the shape of two new standards issued by the International Sustainability Standards Board (ISSB), IFRS 1 and IFRS 2, with more to come in the future

The IFRS Sustainability Disclosure Standards, to use their full title, were published in June this year to become effective from January 2024. They are designed as a baseline applicable across jurisdictions and ask for disclosure of material information about sustainability and climate-related risks and opportunities. It is hoped that, by providing a baseline for sustainabilty disclosures across jurisdictions, business will have greater certainty and clarity of what’s required right across their global footprint.


The standards are not mandatory by default in any jurisdiction and require individual countries to decide if and when to adopt the standards into law. That does not mean businesses can afford to be complacent. A number of jurisdictions, such as Hong Kong, the UK and Canada, are already consulting on, or exploring introducing, the IFRS Sustainability Disclosure Standards in their reporting requirements. Hong Kong is proposing that they would apply from 2025 at the earliest, with additional transitional relief to facilitate their introduction. In the UK, the Financial Reporting Council’s UK Sustainability Disclosure Technical Advisory Committee has just launched a Call for Evidence to gather industry views on the detailed requirements of the IFRS Sustainability Disclosure Standards. The Call for Evidence closes on 11th October 2023 and the committee will then make a recommendation to the UK Government on introducing UK-specific requirements based on the standards and feedback received.

Scale and scope

An expansion in the scale and scope of corporate disclosure in those jurisdictions applying IFRS Accounting Principles, the IFRS Sustainability Disclosure Standards are broadly expected, over time, to replace Taskforce for Climate-related Financial Disclosures (TCFD) in several jurisdictions, so will be of note to a significant number of businesses. The structure of the IFRS Sustainability Disclosure Standards will be recognisable to those familiar with TCFD, covering Governance, Strategy, Risks and Opportunities, and Metrics. The sustainability standards include Scope 3 GHG emission disclosures when material for a company and the use of climate-related scenario analysis, with guidance specifying where the inclusion of a Paris-aligned scenario may be relevant.

Benefits to meeting requirements

While the IFRS Sustainability Disclosure Standards are not mandatory by default in any jurisdiction and talk of a new era of a globally-aligned disclosure requirements is premature, the publication of the standards is a welcome development towards a global baseline and one that business leaders cannot ignore. Businesses that take steps to prepare now will benefit – meeting these requirements will better position companies to attend to additional ESG demands further down the line.