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Comparing sustainability reporting requirements

Comparing requirements from the ISSB, EU and US SEC

event 17 Dec, 2024
Interweaving threads

(This article was published on 30 November 2022 and updated on 17 December 2024)1

Highlights

鈥撀�What鈥檚 the issue?

鈥� What鈥檚 the impact?

鈥� What鈥檚 next? Read our guide on how the requirements compare

Sustainability reporting is developing quickly, with new requirements2聽from the International Sustainability Standards Board (ISSB), EU and US Securities and Exchange Commission (SEC).

The aim of the ISSBTM聽Standards is to create a global baseline for investor-focused sustainability reporting that local jurisdictions can build on.

Mark Vaessen
Mark Vaessen

Partner

乐鱼（Leyu）体育官网 in the Netherlands

What鈥檚 the issue?

There is some commonality among the requirements 鈥� including that the TCFD3聽framework forms a shared input.

However, there are also areas where they are not aligned, which will create practical challenges for companies trying to design coherent and consistent reporting that is internationally comparable, but also meets local needs.

In addition to points of detail, differences include the greater scope and scale of the ESRSs with their wider stakeholder focus.

What鈥檚 the impact?

The requirements are ambitious and will have a significant impact on companies. For multinationals and others needing to apply multiple frameworks, there are many potential challenges.聽

For companies, interoperability is going to be a real challenge for those preparing a coherent narrative on what is important to their business.聽

Companies may also have to provide different and more detailed information depending on the frameworks applicable to them.

For investors and other stakeholders, the differing requirements will make comparisons between companies and decision making more challenging.

What鈥檚 next?

Read our聽聽(PDF 1 MB) to gain further insight on some of the practical challenges you may encounter as you prepare for the new sustainability reporting standards.

1. Understand if and when the requirements apply to you, or whether you will choose to apply them voluntarily.

2. Understand where similarities and differences exist between the requirements that may affect you.

3. Identify the information you will need to disclose to provide a coherent narrative.

4. Prepare for fast adoption of multiple sets of requirements that may affect your company.聽

Our dedicated聽ISSB Standards Today聽page will keep you up to date with the latest developments in this area.

翱耻谤听ISSB Standards digital hub听补苍诲听ESRS Today聽page will provide practical guidance to help you get ready for the new聽standards. These resources capture the latest thinking together with our insight.聽

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Comparing sustainability reporting requirements

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1聽This article and its accompanying guide have been updated for developments in the requirements.聽

2聽We use the term 鈥榬equirements鈥� to refer collectively to:

  • the final standards from the ISSB, referred to individually as IFRS庐聽Sustainability Disclosure Standards or ISSB聽Standards;
  • the final text of the first set of ESRSs from the EU, referred to as European Sustainability Reporting Standards (ESRSs); and
  • the requirements from the US SEC, referred to as the US SEC climate rule. (Update聽鈥� April 2024: the SEC stayed the climate rule pending judicial review 鈥� find out more in this聽article.)

3聽Task Force on Climate-related Financial Disclosures.

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