July 25, 2023/IOSCO

In a major step towards consistent, comparable and reliable sustainability information, IOSCO announces today that it has decided to endorse the sustainability-related financial disclosures standards, recently issued by the International Sustainability Standards Board (ISSB), IFRS S1 and IFRS S2.

IOSCO has engaged extensively with the ISSB over the last two years, culminating in a comprehensive and independent review of the final ISSB Standards. After a detailed analysis, IOSCO has determined that the ISSB Standards are appropriate to serve as a global framework for capital markets to develop the use of sustainability-related financial information in both capital raising and trading and for the purpose of helping globally integrated financial markets accurately assess relevant sustainability risks and opportunities.

IOSCO now calls on its 130 member jurisdictions, regulating more than 95% of the world’s financial markets, to consider ways in which they might adopt, apply or otherwise be informed by the ISSB Standards within the context of their jurisdictional arrangements, in a way that promotes consistent and comparable climate-related and other sustainability-related disclosures for investors.

Jean-Paul Servais, Chair of the Board of IOSCO, commented: “This is a critical moment in advancing IOSCO’s goal of improving climate-risk disclosure for investors. Investors are demanding better information about sustainability risks and opportunities, and the G20, the G7, and the FSB rely on IOSCO to assess whether the ISSB Standards are fit for purpose for capital markets. Our members, working together, have carefully analysed the ISSB’s standards against IOSCO’s endorsement criteria. IOSCO has found that the ISSB conducted a robust process and have concluded that these standards serve as an effective and proportionate global framework of investor-focused disclosures on sustainability- and climate-related risks and opportunities. At the beginning of my mandate as Chairman, I said IOSCO would meet expectations because the delivery of high quality standards in due time is of the essence when it comes to sustainability. Today, with the publication of the endorsement decision, I am honoured to say we did just that.”

Rodrigo Buenaventura, Chair of IOSCO’s Sustainable Finance Task Force, added: “The publication of this endorsement is the result of truly global efforts. On the one hand the ISSB and the IFRS Foundation have ensured that the final standards are the result of broad stakeholder input. On the other hand, this endorsement by IOSCO is an important milestone that we expect will result in global capital markets being able to access reliable, consistent and comparable sustainability related information which will allow investors to price sustainability risks and opportunities and help them make investment decisions.”

Today’s endorsement of the ISSB Standards is in line with IOSCO’s objective to achieve a comprehensive toolkit for both sustainability-related disclosure and related assurance standards that should be available to jurisdictions and ready for use by issuers for the end-2024 accounts.

In this regard, IOSCO welcomes the IFRS Foundation’s The jurisdictional journey to implementing IFRS S1 and IFRS S2—Adoption Guide overview published today. It provides an outline of a forthcoming Adoption Guide that will set out pathways for implementation of the ISSB Standards. IOSCO is committed to working closely with the ISSB, other relevant bodies, and IOSCO members to promote consistent and comparable climate-related and other sustainability-related disclosures for investors through the roll out of a comprehensive capacity building programme.