Understanding the IFRS Sustainability Disclosure Standards and the Evolving Global Framework for Climate-related Reporting

Reporting your brand’s social and environmental sustainability goals and progress is no easy feat. As sustainability regulations emerge across global industries sustainability reporting has transitioned from a voluntary exercise to a mandated expectation. 

In collaboration with the global non-profit alliance Cascale, Worldly published a deep dive paper to examine and help businesses better understand the International Financial Reporting Standards (IFRS). The new paper offers practical guidance for brands, retailers, manufacturers, and suppliers seeking to navigate the complexities of investor-focused sustainability reporting.

The International Sustainability Standards Board (ISSB) is an independent standard-setting body within the IFRS. Adopting International Sustainability Standards Board (ISSB) standards is critical for global alignment and collaboration when it comes to sustainability reporting, as over 1,000 companies around the world are now integrating ISSB disclosures into their reporting practices. 

Building on the framework established by the the Task Force on Climate Related Financial Disclosures (TCFD), the ISSB released its first two standards in June 2023, which became effective January 2024 — IFRS S1 and S2. IFRS S1 requires an entity to disclose information about all sustainability-related risks and opportunities. This standard aims to have companies disclose the sustainability-related risks and opportunities that are financially material to investors, connecting back to a company’s financial statements. Meanwhile, IFRS S2 focuses on specific provisions for climate-related disclosures, such as requiring companies to explain their strategies for addressing identified climate risks. 

With the phasing in of the EU’s Corporate Sustainability Reporting Directive (CSRD), mandatory sustainability reporting requirements have emerged in 2025. Around three-quarters of the world’s 5,800 largest companies report on sustainability, with 96 percent of the largest 250 companies doing so. Companies in the textile, apparel, footwear, and consumer goods sectors that operate internationally can take steps to prepare by aligning their sustainability reporting practices with the IFRS S1 and S2 standards as a global baseline. 

Learn more about IFRS and download the report: Policy Deep Dive: Building a Global Baseline: The Role of IFRS Sustainability Disclosure Standards