Navigating the Evolving Landscape of ISSB-Aligned Regulations: A Guide for Companies

The global regulatory environment for sustainability reporting continues to evolve, with ISSB-aligned regulations taking shape around the world. The implications of the ISSB can be significant. The standards provide an opportunity for companies to provide more trusted and transparent sustainability disclosures through the integration of sustainability with finance and the application of external assurance. For companies, this presents a prime opportunity to refine their approach to sustainability management and turn sustainability into an engine for growth and resilience.

Achieving alignment with the ISSB demands a proactive approach to data management, process improvements, and compliance. For organizations to prepare for compliance and respond to the ISSB with confidence, it is paramount to understand how each local transposition of the standards could impact the business.

The ISSB has prepared jurisdictional profiles for those countries that are considering or have implemented ISSB aligned disclosure requirements-those can be found here.

Additionally, here is summary table for reference:

ISSB-Aligned Sustainability Disclosure Regulations - Alphabetical by Jurisdiction

The process for Companies Facing ISSB-aligned Regulations

The application of the ISSB may differ depending on the jurisdiction within which you need to report, so it is important to familiarize yourself with local requirements. However, to effectively address the new regulations, companies will need to establish a well-defined internal process. Navigating the complexities of these new global reporting standards requires a strategic and methodical approach that goes beyond simply gathering data. An anticipatory and systematic process ensures not only compliance but also a smoother transition and a more robust reporting framework.

This journey typically involves several key considerations:

What teams should be involved?

Compliance with ISSB-aligned regulations extends beyond traditional finance and accounting departments. A cross-functional approach is essential, involving stakeholders from sustainability, legal, operations, investor relations, and even product development. Establishing a dedicated working group with clear roles and responsibilities can streamline the process and ensure comprehensive coverage.

How should existing disclosure be leveraged and aligned?

Many companies already engage in some form of sustainability reporting, whether through GRI, SASB, ESRS, or other frameworks and standards. The key is to assess existing disclosures, identify overlaps with ISSB requirements, and strategically leverage existing data and processes to minimize duplication of effort and ensure alignment with the new standards. This often involves a gap analysis to pinpoint areas requiring new data collection or reporting methodologies.

How to address jurisdiction-specific reporting requirements?

While the ISSB aims for global comparability, individual jurisdictions may introduce their own nuances and specific requirements. Companies operating internationally must diligently identify and understand these regional variations to ensure full compliance across all relevant markets. This may involve engaging with local legal and regulatory experts. Additionally, the ISSB jurisdictional profiles referenced previously can be helpful resources in determining jurisdictional specific requirements for multi entity reporting.

The role of technology in ISSB disclosures

The demands of ISSB-aligned reporting-from comprehensive data collection to multi-jurisdictional compliance and external assurance-present a considerable challenge for any organization. To meet this challenge head-on, companies must move beyond reactive, siloed efforts and unify their data, processes, and teams. This new era of sustainability disclosure, driven by the need for accuracy and efficiency, makes technology a critical necessity.

When embarking on this process, organizations must align with advanced technology platforms that provide the tools to manage the complexity of the task, enabling them to:

• Facilitate cross-functional team collaboration: Integrated platforms connect legal, finance, accounting, and compliance teams, enabling seamless communication, shared access, and real-time updates
• Leverage artificial intelligence for disclosure alignment: AI analyzes existing disclosures to identify inconsistencies, redundancies, and standardization opportunities, accelerating drafting and review
• Track and manage jurisdictional-specific requirements: Centralized documentation and mapping tools help monitor evolving requirements, minimizing non-compliance risk.

Beyond climate-first ISSB-aligned disclosure: A broader Perspective

While the initial focus of ISSB-aligned disclosure primarily centers on climate-related information, this is only part of the story. Companies must adopt a broader perspective, recognizing that stakeholder expectations extend far beyond just environmental factors. The ISSB standards are designed to provide a comprehensive view of sustainability-related financial risks and opportunities, and a truly effective strategy considers how your sustainability program impacts all stakeholders. To succeed in this new era of reporting, companies must think about the evolving demands of their investors, customers, and the public.

What exactly are these key stakeholders looking for?

What investors expect

Today's investors are increasingly sophisticated in their evaluation of sustainability performance. They are looking beyond traditional financial metrics to understand a company's resilience, risk management capabilities, and long-term value creation through the lens of sustainability. Transparent and robust ISSB-aligned disclosures on material sustainability related financial risks can provide investors with the reliable information they need to make informed decisions.

What customers expect

Both B2C and B2B customers are increasingly prioritizing the environmental and social impact of the products and services they acquire. For B2C customers, this translates to a direct expectation for companies to operate responsibly and transparently, influencing individual purchasing decisions and building brand loyalty. In B2B relationships, demonstrating a commitment to sustainability through credible reporting can enhance a company's reputation, build trust with business partners, and become a key factor in supply chain and procurement decisions. This is revenue at risk!

What the public expects

Beyond investors and customers, the broader public is increasingly holding companies accountable for their societal impact. Public scrutiny of corporate sustainability practices continues, driven by media attention, NGO activism, and social media. A forward-looking and comprehensive ISSB-aligned disclosure can help foster trust, mitigate reputational risks, and demonstrate a commitment to being a responsible corporate citizen.

The path forward

The emergence of ISSB-aligned regulations marks a significant shift in corporate reporting, and companies that proactively embrace this transformation, rather than simply reacting to mandates, will be the ones more likely to thrive. This approach means establishing a clear process, leveraging technology for accuracy and efficiency, and recognizing that transparency extends to all stakeholders-from investors to customers and the wider public. By viewing ISSB-aligned regulations not as a compliance burden, but as a strategic opportunity to build trust and demonstrate long-term value, organizations can build a stronger foundation for resilience and adaptability as the market continues to change.

To learn more about how Workiva can help with ISSB compliance, request a demo today.

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