The International Sustainability Standards Board: Evaluating and informing work efforts in the interest of sustainable development
The International Sustainability Standards Board (ISSB) was formed during 2021. Since its formation, it has published two standards. “IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information” (S1) and “IFRS S2 Climate-related Disclosures” (S2). These standards were not developed as greenfield projects but to capitalise on earlier work by the Taskforce for Climate-related Financial Disclosures (TCFD), the International Integrated Reporting Council (IIRC), the Climate Disclosure Standards Board (CDSB) and the Sustainability Accounting Standards Board (SASB). S1 and S2 are the first of many standards which will be developed by the ISSB in keeping with its four stated objectives:
- to develop standards for a global baseline of sustainability disclosures;
- to meet the information needs of investors;
- to enable companies to provide comprehensive sustainability information to global capital markets; and
- to facilitate interoperability with disclosures that are jurisdiction-specific and/or aimed at broader stakeholder groups.
The success of the ISSB’s standard-setting is not, however, guaranteed. At the conceptual level, the ISSB’s decision to prioritise the information needs of investors and frame social and environmental factors in economic terms may undermine rather than advance the realisation of the Sustainable Development Goals. The extent to which the standard-setter has taken cognisance of experiences with other types of sustainability-related reporting and the efforts of more than 30 years of social and environmental accounting research is debatable.
At the political level, the world’s largest greenhouse gas emitter is considering mandating certain aspects of climate-related reporting for specified organisations but the USA’s regulators have adopted neither S1 nor S2 . The European Union has mandated sustainability reporting more generally for affected organisations but the sustainability reports will be prepared according to the “European Sustainability Reporting Standards” rather than those issued by the ISSB. The extent to which other capital markets in South America, Asia and Africa will either adopt S1 and S2 or align their existing sustainability reporting guidelines with positions outlined in the ISSB’s standards remains to be seen.
At the technical level, the resources which organisations require to operationalise S1 and S2 need to be carefully considered. Will the costs of reporting be justified by the benefits? Will the application of S1 and S2 advance strategic and operational changes at the company-level which contribute to long-term sustainable development? What guarantees do stakeholders have that the newly published standards will be applied with a sense of genuine commitment rather than being used as a tool for impression management?
List of topic areas
This special issue calls on researchers to mobilise the considerable body of social, environmental and sustainability accounting literature to assist with informing the ISSB’s work effort; evaluating the impact of its work completed to date and provide recommendations for implementing accounting management and governance systems which can be used to advance the sustainable development agenda. Theory development and application are important but the organisers are especially interested in original research which engages with different theories and methods to tackle practical issues in sustainability reporting and accounting. Examples include, but are not limited to, the following:
- Assessments of how S1 aligns with or undermines principles/recommended practices per the IIRC, GRI and leading academic work on different forms of environmental, social and sustainability accounting and reporting;
- How S1 and S2 can be integrated with traditional financial accounting standards to provide useful information for investors and other stakeholders.
- The challenges encountered or expected to be encountered by organisations adopting S1 and S2 and how these may be overcome;
- The extent to which interoperability between the ISSB’s standards and those issued by other bodies (such as the EU) could be achieved in practice keeping in mind the existing variations in sustainability reporting guidelines and requirements in different jurisdictions;
- How national standard setters, regulators and policy-makers can use S1 and S2 as a foundation for the development of jurisdiction-specific sustainability reporting guidelines/recommendations/regulations;
- Reviews of the similarities and differences between S2 and other reporting frameworks with a clear explanation of the implications for practitioners, regulators and investors;
- The impact the ISSB’s work will have on the short-, medium- and long-term activities of other standard setters including the possibility of the ISSB becoming the dominant international standard setter in the sustainability reporting space;
- Critical reflections on the conceptual approach taken by the ISSB when developing S1 including the Board's use of the Conceptual Framework for Financial Reporting and earlier work on management commentary;
- The advantages and disadvantages of the ISSB’s approach to framing sustainability-related reporting as part of an economic discourse including its approach to materiality determination;
- How the notion of “impact” and “financial materiality” have informed standard-setters and the implications for theory and practice;
- Technical and conceptual analyses of the differences between “financial” or “ economic impact” materiality and “double materiality” including the implications for preparers, users and regulators;
- Methods for incorporating environmental, social and governance factors into management systems, internal controls, valuations, key performance indicators and risk appraisals;
- The challenges of collecting credible and complete data for compiling sustainability reports under S1 and S2 with recommendations for addressing existing limitations including, for example, the application of data management techniques, refined internal control systems and the use of artificial intelligence;
- How academic research on issues like biodiversity reporting, extinction accounting and ecological accounting can be incorporated practically into sustainability reports prepared under S1 and S2 and/or be adapted by the ISSB when it develops further standards;
- The role played by organisations’ governing bodies in advancing sustainability reporting including practical recommendations for more effective governance of sustainable development;
- The alignment between the Sustainable Development Goals and ISSB’s standards;
- The use and impact of consultants helping companies to prepare sustainability reports;
- Detailed case studies illustrating the application of S1 to sustainability-related matters other than climate change; and
- Detailed case studies which could be used to train students on the implementation of S1 and S2.
The special issue is not focused on advancing a specific theoretical or conceptual stance on sustainability. All appropriate research methods/designs are welcome.
- Closing date for submissions: 31 October 2024
- Expected publication date of special issue: early 2026
All submissions should be made using the journal’s online system, choosing the special issue during submission.
Submissions are made using ScholarOne Manuscripts. Author guidelines must be strictly followed.
Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to “Please select the issue you are submitting to”.
Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.