UK Formally Adopts ISSB Sustainability Standards

1. ISSB – a refresher

ISSB - the sustainability arm of the IFRS - published two standards in June 2023, IFRS S1 on general sustainability disclosures and IFRS S2 on climate disclosures. The UK has adopted the same labels: UK SRS S1 and UK SRS S2. Both standards use a four pillar structure that will be familiar to users of TCFD (governance, strategy, risk management and metrics and targets) and indeed the S2 climate standard is very similar to TCFD, though goes further in some respects. S1, on the other hand, requires the organisation to identify for itself the sustainability-related risks and opportunities which should be disclosed to primary users of general purpose financial reports, namely those that can reasonably be expected to affect its financial prospects over the short, medium and long term. This is quite different to the highly prescriptive sustainability reporting standards required for use by preparers under the EU Corporate Sustainability Reporting Directive.