March 24, 2023

What you need to know about the ISSB’s International Applicability of the SASB Standards project


The SASB Standards will support companies implementing S1: General Requirements for Disclosure of Sustainability-related Financial Information.

As we discussed in our recent update on the role of the SASB Standards within the ISSB Standards, companies applying S1 will consider the industry-based SASB Standards for topics beyond climate, to help them identify their sustainability-related risks and opportunities and provide appropriate disclosures.

The ISSB is committed to maintaining and enhancing the SASB Standards. The international applicability project is an important example of this, to deliver targeted updates to specific aspects of the SASB Standards – this isn’t a broad update to the standards.

One global market

The strong growth in companies applying the SASB Standards from around the world has demonstrated the relevance and applicability of these disclosures across jurisdictions. This reflects that capital markets operate in a global context. Many investors’ portfolios are allocated among companies domiciled, or with operations, in various jurisdictions around the world. Sustainability-related risks and opportunities are also global.

The SASB Standards are already being applied by over 2,500 companies in more than 70 jurisdictions around the world, including 71% of the S&P Global 1200 Index. These companies will therefore be in a prime position to apply S1 when it is issued later this year.

That said, a subset of the SASB Standards – around 20% – incorporate references to specific jurisdictional laws and regulations that require updates to ensure international applicability and remove any regional bias.

For example, in the meat, poultry and dairy industry the SASB Standards have a metric around the percentage of animal production that receives ‘medically important’ and ‘not medically important’ antibiotics. To define what is and is not important the SASB Standards currently use the US Food and Drug Administration’s list. The proposed approach to updating the SASB Standards would update this to refer to the World Health Organization’s list instead – a globally used reference.

As such, the ISSB is working to deliver targeted enhancements to the international applicability of the SASB Standards on a timely basis to ensure any companies can use them to help them to provide disclosures applying S1, regardless of where they are based or their operating footprint.

These enhancements will help reduce application costs and increase the comparability and decision-usefulness of the resulting disclosures.

Project targets international applicability, without altering underlying concepts

Last year, the ISSB consulted on industry-based climate-related topics and metrics, alongside its S2 Standard on climate-related disclosures.  Those disclosures were based on the climate-related disclosures in the SASB Standards, with proposed targeted amendments to facilitate international applicability. The ISSB will include industry-specific guidance based on these topics and metrics in S2 that entities will be asked to consider when applying that Standard.

The International Applicability of the SASB Standards project addresses the remaining contents of the 77 industry-based SASB Standards, beyond climate.

A group of ISSB members – the SASB Standards Board Advisor Group[1] – is working with the ISSB technical staff to develop a methodology to enhance the international applicability of the SASB Standards, without altering the intent or underlying concepts of any specific disclosure topic or metric.

The methodology will be based on the methodology used in last year’s consultation on climate-related disclosures, incorporating the related feedback that consultation generated on the approach.

By constraining revisions to these limited objectives, the methodology focuses on procedural revisions and avoids any substantive revisions of the SASB Standards original content.

The ISSB plans to consult on the proposed methodology to facilitate obtaining targeted feedback on the approach to making these amendments. This will be complemented by outreach to obtain more detailed input and a near final version of the changes will be made publicly available on the IFRS Foundation website prior to completion.

Next step: exposure draft

At a future meeting, the SASB Standards Board Advisor Group will present to the full ISSB a draft of an exposure draft detailing the proposed methodology and processes to update the SASB Standards (beyond climate) to address their international applicability.

The ISSB expects to publish the exposure draft around May 2023 for public comment, with the objective of issuing the updated SASB Standards based on the outcomes prior to S1 coming into effect.

Ongoing enhancement and maintenance of the SASB Standards

The International Applicability of the SASB Standards project is the first step in the ISSB’s long-term commitment to maintain and enhance the SASB Standards. There will be a range of projects over time to deliver this commitment to ensure these Standards remain relevant and decision-useful for investors. For example, the ISSB has already discussed its plans to monitor the application of the industry-specific requirements in S2 with the objective of proposing they become required disclosures, subject to any necessary enhancements, at a future date.

The ISSB will be guided by its upcoming consultation on agenda priorities, which will look at four areas including biodiversity, human rights, human capital and integration in reporting. As with S1 and S2, future projects will leverage the industry-based SASB Standards when relevant.

To stay updated on the ISSB’s work and opportunities to get involved, subscribe for news alerts.

[1] At the October 2022 IFRS Foundation Trustees meeting, the Due Process Oversight Committee (DPOC) agreed that a Board Advisor Group comprised of three to five ISSB members will provide drafts of exposure drafts and final amendments related to the SASB Standards to the ISSB as a mechanism to facilitate an efficient standard setting process. The SASB Standards Board Advisors will execute the ISSB’s strategy working closely with the staff and make related recommendations to the ISSB for approval, such as releasing exposure drafts for public comment or ratifying an update to the SASB Standards. The ISSB will approve exposure drafts published for public comment and ratify all updates to the SASB Standards. The SASB Standards Board Advisor Group consists of Jeff Hales (Chair), Jenny Bofinger-Schuster, Verity Chegar, Bing Leng and Sue Lloyd.