The ISSB framework: what it is, who governs it, and how it reached the UK

The IFRS Foundation says the ISSB builds on the work of the CDSB, the TCFD, the Value Reporting Foundation’s Integrated Reporting Framework and the industry-based SASB Standards, together with the World Economic Forum’s Stakeholder Capitalism Metrics.

Before 2021 a preparer chose between four or five overlapping voluntary frameworks; after 2023 there is one investor-facing baseline, and the others are inside it or aimed at a different audience.

The sequence is short enough to recite, which is what makes it dangerous: formed 2021, standards issued June 2023, IFRS S2 effective for annual periods beginning on or after 1 January 2024.

That last date belongs to IFRS S2 and to nothing else — the phrase “effective date” does not appear in either UK standard.

The framework comparison for UK readers is on ESG frameworks in the UK.

IFRS S1 governs how an entity identifies, measures and presents sustainability-related risks and opportunities that could reasonably be expected to affect its prospects — every topic, climate included.

IFRS S2, in the Foundation’s words, “integrates and builds on the recommendations of the TCFD and incorporates industry-based disclosure requirements derived from SASB Standards”.

The two are designed to be applied together: IFRS S1 may be applied early only alongside IFRS S2, so the general standard cannot be used to avoid the climate one.

Both are readable in full without paying or registering: the paragraph-numbered text is served openly by the Foundation, and only the PDFs on the navigator need registration.

This is the single most consequential thing to get right about the ISSB framework, and the one most often stated backwards.

The framework applies financial materiality: information is in scope when it could reasonably be expected to affect the entity’s cash flows, its access to finance or its cost of capital.

It asks about the world’s effect on the company; the European regime also asks about the company’s effect on the world.

The ISSB and GRI have said so jointly: ISSB Standards require information about impacts “only in so far as this provides material information for investors with respect to sustainability-related risks and opportunities for the entity” (joint statement, 26 May 2026).

GRI occupies the other half: its own guide says its standards represent the impact side of double materiality and attributes the term to the European Union (GRI on double materiality).

So neither GRI nor the ISSB is a double-materiality standard on its own; the EU regime is the one that asks both questions.

The comparer beside this text applies each test to one matter; the long form is on double materiality.

The SASB Standards are the industry-specific layer, and the ISSB has been responsible for them since the August 2022 consolidation.

There are 77 industries across 11 sectors, classified under SICS, which the Board decided in May 2024 to retain.

The version stamp is no longer uniform: most carry 2023-12, effective for periods beginning on or after 1 January 2025; three financial-sector standards carry 2025-12, effective 1 January 2027.

How binding the material is depends on which text you apply, and this is the sharpest UK divergence there is.

The UK softened “shall” to “may” at some paragraphs and not others, and Annex A records each; the duty to disclose which SASB topics were applied was not softened at all.

The paragraph-by-paragraph map is on SASB Standards, and the ESG standards page places SASB among the other frameworks.

IFRS S2 is where the framework stops being architecture and starts being work.

Greenhouse gas emissions across all three scopes, measured on the GHG Protocol, with Scope 3 covering the categories the entity includes and financed emissions for financial institutions.

Climate resilience assessed through scenario analysis — the strategy tested against more than one plausible climate future, at a depth commensurate with the entity’s circumstances.

Named governance: which body oversees climate, how it judges its own competence, how information reaches it, and whether executive remuneration is linked to climate.

Current and anticipated financial effects on financial position, performance and cash flows, and industry-based metrics.

And, where the entity has a climate transition plan, information about it — which is where more preparers go wrong than anywhere else, because the standard does not require a plan to exist.

The UK position on plans is on climate transition plans.

The IFRS Foundation publishes its own count, and it is the only count worth citing.

More than 45 jurisdictions are using the ISSB Standards, on the Trustees’ five-year plan of 18 August 2026 — a floor that has climbed through 36 in June 2025 and 39 in October 2025.

“Taking steps towards” is not “in effect”, and the second number is the one a reader wants: requirements had come into effect in 19 jurisdictions as at 24 February 2026.

The directory splits jurisdictions two ways: a profile is published once an approach is finalised; a snapshot previews proposals and may differ from the final requirements.

Adding the two into one “adopted” count is how an honest figure becomes an overstatement.

On coverage, the Foundation’s May 2024 prose gives nearly 55% of global GDP, more than 40% of global market capitalisation and more than half of global greenhouse gas emissions, restated in its 2024 progress report.

Market capitalisation lags GDP because of one absence, which the Foundation names: the United States has not adopted.

The UK endorsed the framework rather than adopting it wholesale.

UK SRS S1 and UK SRS S2 were published on 25 February 2026 as the UK versions of IFRS S1 and S2, with the differences recorded in Annex A of the government response, which carries no count.

They were issued for voluntary use, and the government’s guidance still describes them that way for any entity not caught by a rule.

The FCA’s final rules, published on 30 September 2026, require companies listed in five UK Listing Rules categories to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027, with first reports in 2028.

The instrument was made by the FCA Board on 24 September 2026 and comes into force on 1 January 2027; the consultation it finalises, CP26/5, had proposed a mandatory S2, which did not survive.

The Foundation’s UK snapshot, dated 18 June 2026, still records the regulatory stage as “In progress”.

The listing-rule mechanics are on UK SRS and the FCA, and who is caught on UK SRS thresholds.

The UK splits one decision into three: the government endorses the standard; the FCA decides whether listed companies must use it; and the government decides, separately, whether the Companies Act should require it of anyone else.

Steps one to seven are done.

Step four is the one most often missed: DBT’s letter to the FCA of 5 January 2026 explained why the standards would carry no relief periods, leaving them to whoever makes the rule.

That is why UK SRS S1 ¶E5 and UK SRS S2 ¶C6 subject the reliefs to the Companies Act, the FCA or another UK regulator.

Step seven used that power: PS26/19 sets one year for Scope 3 and two years for non-climate matters, and the FCA wrote CP26/5 against the exposure drafts, so its earlier description of relief lengths was the drafts’.

PS26/19 gives no total company count; CP26/5 Annex 2 ¶43 had estimated around 600 listed companies affected, and that remains the consultation’s estimate.

Step eight is open: the government’s Modernising corporate reporting consultation says it “will consider how UK SRS should be reflected in the Companies Act 2006”, and proposes no mechanism or date — see UK SRS and MCR.