The short answer is yes, ISSB standards are currently voluntary.
The International Sustainability Standards Board (ISSB) is a relatively new organization, established in 2021. Its mission is to develop a globally recognized set of sustainability disclosure standards. These standards are designed to help companies report on their sustainability-related risks and opportunities in a consistent and comparable way.
The ISSB's initial standards, known as IFRS S1 and IFRS S2, are currently in a draft phase and are expected to be finalized in 2023. Once finalized, these standards will be voluntary for companies to adopt. However, it is anticipated that many jurisdictions and regulatory bodies around the world will eventually require companies to comply with ISSB standards.
Here are some key points to consider:
- Voluntary adoption: Companies are not currently obligated to follow ISSB standards.
- Future potential for mandatory adoption: Many regulatory bodies are considering making ISSB standards mandatory, which could significantly impact companies' reporting practices.
- Alignment with existing frameworks: The ISSB aims to align its standards with existing sustainability frameworks, such as the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD).
It is important to note that the landscape of sustainability reporting is constantly evolving. As ISSB standards become more widely adopted and regulatory requirements change, the level of compliance required from companies will likely increase.
