The International Sustainability Standards Board (ISSB) has published two pivotal draft proposals outlining significant revisions to the SASB Standards and consequential updates to the implementation guidance for IFRS S2 Climate-related Disclosures. This marks a crucial step in the ISSB’s 2024-2026 work plan aimed at refining its global sustainability reporting baseline.
Key Focus of the Proposals:
- Comprehensive Industry-Specific Revisions: The drafts include a detailed review and proposed changes for nine priority industries. This encompasses all eight sectors within the extractives and minerals processing industry group, plus the processed foods industry.
- Cross-Industry Metric Harmonization: Targeted amendments are proposed to standardize specific sustainability metrics across 41 additional SASB industry standards. Key areas addressed include water stewardship, worker health and safety, and other material sustainability factors.
- Alignment of IFRS S2 Guidance: To ensure coherence with the updated SASB Standards, corresponding revisions are suggested for the IFRS S2 application guidance relevant to the nine priority industries and 37 of the 41 industries receiving targeted metric updates. This specifically enhances alignment on climate-related topics.
Strategic Objectives:
These updates are designed to:
- Assist companies in more effectively applying the ISSB Standards (IFRS S1 and S2).
- Enhance the decision-usefulness of sustainability information for global investors.
- Continue supporting entities utilizing the SASB Standards for voluntary reporting initiatives.
- Promote greater interoperability with other major sustainability reporting frameworks (e.g., GRI, EFRAG ESRS, TNFD).
Unprecedented Global Consultation:
This consultation represents the first global opportunity for stakeholders to provide the ISSB with feedback on the SASB Standards’ cost-effectiveness and decision-usefulness. Stakeholders are specifically invited to comment on metrics covering:
- Greenhouse Gas Emissions
- Energy Management
- Water and Wastewater Management
- Workforce Health, Safety, and Well-being
- Labor Practices
An innovative online survey format facilitates focused feedback on specific sections of the proposals. The ISSB is also preparing translations of the drafts to broaden global participation.
Development Process:
The proposals result from extensive market engagement, incorporating insights from global investors, preparers (companies), and subject matter experts. Collaborative efforts with the Global Reporting Initiative (GRI), the European Financial Reporting Advisory Group (EFRAG), and the Taskforce on Nature-related Financial Disclosures (TNFD) were instrumental, particularly in enhancing international applicability and interoperability.
Next Steps & Timeline:
- Comment Deadline: Stakeholder feedback is open until 30 November 2025.
- Supporting Materials: “Clean” versions of the proposals (without tracked changes) and other supporting documents are available on the IFRS Foundation website.
- Finalization: Following review of feedback, the ISSB intends to issue final amendments in 2026.
- Future Updates: Draft proposals for revisions to the Electric Utilities & Power Generators standards and two additional Food & Beverage sector standards are slated for publication by the end of 2025. Assessments of further industry standards will commence later this year.
Source: IFRS Foundation, 3 July 2025