ISSB Exposure Drafts IFRS S1 and IFRS S2


In March 2022, the International Sustainability Standards Board (ISSB) issued its first two Exposure Drafts, [draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and [draft] IFRS S2 Climate-related Disclosures.

Our response to the ISSB was submitted on 27 July 2022.


In November 2021, the IFRS Foundation announced the formation of the ISSB to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs.

Following a request from The Department for Business, Energy and Industrial Strategy (BEIS), the UKEB agreed to assist the UK Government by carrying out work in this area to consider the overlap or impact of the proposed ISSB disclosure standards with those issued by the International Accounting Standards Board (IASB).

The UKEB agreed a project plan that included consideration of the overlap between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards and discussion with relevant UK stakeholders (including government departments and regulators) and other national standard setters.

UKEB outreach

Our outreach approach is documented in our Project Initiation Plan (PIP) which was approved by the UKEB Board at their April 2022 public meeting. More than 200 stakeholders representing over 90 organisations were engaged during the consultation period on the Draft Comment Letter (DCL). The PIP and DCL are attached below.

On Thursday 30 June a virtual outreach event was held which included a cross government briefing on corporate sustainability reporting with BEIS, the Financial Conduct Authority (FCA) and Financial Reporting Council (FRC), and a panel discussion including users, preparers, the FCA and the ISSB.A recording of the event can be found here. The slides for this webinar can be found here.

We would like to thank all who participated in this important project.

Final Comment Letter

Our final comment letter is attached below.

Due to the close association between the two Exposure Drafts, the UKEB considered them as part of a single project. A single comment letter therefore addresses both exposure drafts.

The UKEB welcomes the Exposure Drafts and strongly supports the need for a general requirements framework for sustainability-related information and the alignment of the climate exposure draft with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

The UKEB acknowledges the many areas of alignment with the IASB’s Conceptual Framework for Financial Reporting, IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, and believe this will improve connectivity with financial reports and help stakeholders to better understand how the information presented is underpinned by financial reporting.

The letter also makes several recommendations to enhance the proposals in the Exposure Drafts while maintaining the significant momentum of the ISSB’s critical agenda. These are noted below.

[draft] IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information

We made ten suggestions for the ISSB to consider relating to;

  1. Achieving a global baseline for sustainability disclosures
  2. The application of proportionality and transitional measures to encourage adoption
  3. The importance of business model-focused disclosures
  4. Clarity on scope and key definitions
  5. The use of third-party documents
  6. Reliability and levels of certainty of disclosures
  7. The use of illustrative examples and non-mandatory educational guidance
  8. Field testing
  9. Leveraging IASB experience regarding due process
  10. Alignment with IFRS Accounting Standards

[draft] IFRS S2 Climate-related Disclosures

We made six suggestions for the ISSB to consider relating to;

  1. Clarifying the scope and key definitions
  2. Avoiding unnecessary duplication
  3. Due process
  4. The potential effective date
  5. Cost v benefits
  6. Achieving a global climate baseline

In addition, in Appendix A to the letter we share, from our perspective as a national standard setter, our view of the readiness of legislators, users, preparers and advisers to work with the sustainability standards.