Prior to the establishment of the ISSB, investors increasingly coalesced around a combination of the TCFD recommendations and SASB Standards as foundational tools to provide capital markets with effective climate- and sustainability-related financial disclosure. As such, the ISSB’s first two standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, combine key aspects of the two.
IFRS S1 and IFRS S2 fully incorporate the TCFD Recommendations, so companies will not need to apply both the TCFD Recommendations and ISSB Standards. An entity applying IFRS S2 would also satisfy the TCFD Recommendations. IFRS S1 requires companies to consider the SASB Standards as a source of guidance, in the absence of a specific IFRS Sustainability Disclosure Standard, for identifying sustainability-related risks and opportunities and appropriate information to disclose. IFRS S2 includes climate-related metrics derived from the SASB Standards as accompanying guidance.
Therefore, companies that already apply the TCFD Recommendations and the SASB Standards are in prime position to apply the ISSB Standards. For more information about how the TCFD recommendations and SASB Standards fit together, see the SASB Climate Risk Technical Bulletin. Visit the IFRS project page for information on the ISSB's IFRS S2 Climate-related Disclosures.