The challenge of double materiality: sustainability at a crossroads

ONE of the more significant announcements at the COP26 meetings in Glasgow in November 2021 concerned the launch of the International Sustainability Standards Board (ISSB) by the International Financial Reporting Standards (IFRS) Foundation.

The creation of the ISSB has been in the pipeline for a while, but the COP26 announcement included the news that the Value Reporting Foundation and the Climate Disclosure Standards Board will be consolidated into the new board. The Value Reporting Foundation consists in turn of both Sustainability Accounting Standards Board (SASB) and the International Integrated Reporting Council (IIRC).

This means that 4 of the top 5 sustainability reporting organisations are now working in a coordinated way on a benchmark reporting standard. Given its backing from the accounting profession, its absorption of several leading reporting standards bodies, along with its favourable reception by governments, financial regulatory bodies and the involvement of the World Economic Forum, the ISSB is most likely to become the leading standard for reporting sustainability, and to become adopted as the basis for mandatory reporting in many jurisdictions.