The ISSB Takes the Helm

In July, a major development unfolded in climate-related financial disclosures: the International Sustainability Board (ISSB) took charge of monitoring compliance of the Task Force on Climate-related Financial Disclosures (TCFD) from 2024. This move came right after the ISSB rolled out two fresh standards, known as IFRS S1 and IFRS S2. IFRS S1 addresses short to long-term sustainability risks and opportunities, while IFRS S2 delves into climate disclosures, both rooted in TCFD. Now, if you’ve been doing a solid job following TCFD guidelines, you’re likely already on the right track under the watchful eyes of the ISSB. The good work our clients have been putting in aligns with the direction the ISSB is taking.

Alignment: Encouraging Common Ground Between ISSB and TCFD 

The comparison between the TCFD and ISSB is outlined in a document published by the International Financial Reporting Standards (IFRS). Notably, the ISSB’s climate requirements align harmoniously with the TCFD’s four core recommendations and 11 recommended disclosures. As a result, organisations will be able to transition between the aligned guidelines seamlessly. This merger represents a natural progression in climate-related financial disclosures, as the TCFD laid the foundational groundwork for addressing climate risks, and the ISSB has built upon it to encompass additional information.  

Divergence: ISSB’s Vision Beyond TCFD 

The ISSB climate standards go beyond the TCFD’s framework introducing supplementary requirements for disclosure. These include industry-based metrics, the role and use of carbon credits to achieve net emission targets, and detailed reporting on financed emissions. By mandating such information, the ISSB aims to enhance transparency and provide investors with a comprehensive understanding of companies’ climate-related strategies and commitments. 

The UK Government 

An endorsement decision for IFRS S1 and S2 is expected, likely within two years, with potential adoption in 2025. While the UK Government might adopt ISSB standards soon, remember that TCFD’s influence remains significant. TCFD’s pioneering work in establishing climate-related reporting is globally acknowledged. Its core recommendations and 11 disclosures are crucial for businesses and investors in addressing climate risks and opportunities. As both the TCFD and ISSB merge, they enhance global organizational transparency and accountability in tackling urgent climate challenges. 

A Partner in Progress 

Carbon Responsible boasts deep climate policy and emissions measurement expertise. We offer precise, comprehensive emissions data analysis and reporting. Our robust methodologies help quantify and track your greenhouse gas emissions across all Scopes, unveiling a clear emissions profile. Our experts can aid in identifying climate risks and opportunities, enhancing transparency and strategic decision-making. Carbon Responisble’s proven track record of helping businesses meet TCFD reporting can greatly reduce your organisations speed to adherence and climate-related risks.