The International Financial Reporting Standards (IFRS) are international accounting standards for companies, issued by the International Accounting Standards Board (IASB). They are intended to regulate the preparation of internationally comparable annual and consolidated financial statements independently of national legislation. The IFRS have been adopted by over 140 countries (the US continues to use FASB and GAAP).

The IFRS Foundation has announced a new International Sustainability Standards Board (ISSB) to develop “in the public interest a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs” according to the IFRS Foundation’s press release. In the future, not only the IASB, but also the ISSB shall be responsible for developing the IFRS. Therefore, both boards will form together the two IFRS standard-setting boards.

The IFRS Foundation has communicated an aggressive timeline to move forward with the development and proposed widespread adoption of the sustainability standards. Assuming countries adopt the new IFRS sustainability reporting standards, the tracking, verification, and reporting of likely a wide range of material ESG elements will be compulsory for companies in those jurisdictions subject to the standards as Mike Munro analyses in a recently published article.