ISSB releases digital Sustainability Disclosure Taxonomy for IFRS S1 and S2

The ISSB released the IFRS Sustainability Disclosure Taxonomy enabling investors to search, extract, and compare sustainability-related financial disclosures digitally. For Indian companies preparing to adopt ISSB-aligned standards, the taxonomy points to a future of machine-readable, comparable disclosures that investors can analyse efficiently across markets.

The ISSB released the IFRS Sustainability Disclosure Taxonomy, enabling investors and capital providers to efficiently search, extract, and compare sustainability-related financial disclosures. The Taxonomy mirrors IFRS S1 General Requirements and IFRS S2 Climate-related Disclosures and their accompanying guidance, and is designed to foster communication between companies and investors without imposing new obligations or affecting compliance with the Standards. Informed by market feedback, it enables companies to consistently label information prepared using ISSB Standards and is designed to be consistent with the IFRS Accounting Taxonomy.

Companies preparing disclosures under IFRS S1 and IFRS S2 are directly affected, gaining the ability to digitally tag and label sustainability-related financial information consistently. Investors and other capital providers benefit from the ability to search, extract, and compare disclosures efficiently as the ISSB establishes its global standards benchmark. Because the Taxonomy is designed to be consistent with the IFRS Accounting Taxonomy, entities already producing digital financial reports can integrate sustainability data into a comprehensive digital reporting package that connects with other digital taxonomies.

Companies adopting ISSB Standards should evaluate how to incorporate the Sustainability Disclosure Taxonomy into their digital reporting workflows to label information consistently. Because the Taxonomy imposes no new obligations and does not affect compliance with the Standards, entities can adopt it to improve comparability without changing underlying disclosure requirements. Preparers should ensure compatibility with the IFRS Accounting Taxonomy to deliver investors a comprehensive digital financial reporting package, and monitor how regulators and exchanges adopting ISSB Standards reference the Taxonomy in their reporting frameworks.

Key figure — Standards mirrored: IFRS S1 General Requirements and IFRS S2 Climate-related Disclosures