The global approach to sustainability disclosures is experiencing a significant transformation, particularly affecting the banking industry. The International Sustainability Standards Board (ISSB) introduced IFRS S1 and IFRS S2 in June 2023, which are set to become mandatory in several countries by 2025. These standards aim to provide consistent and comparable sustainability data.
Countries such as Australia, Singapore, and Hong Kong will enforce these standards by 2025. The UK, Canada, and South Africa are also nearing the final stages of adopting these standards into their regulatory frameworks.
The International Organization of Securities Commissions (IOSCO) has been actively promoting the adoption of ISSB standards across the financial sector. It recently launched a network to support its Growth and Emerging Markets Committee members in implementing these standards locally. Following IOSCO’s endorsement, nearly 56 jurisdictions have begun adopting or utilizing ISSB standards.
For banks, adopting IFRS S1 and S2 is crucial as it provides consistent data for assessing climate-related risks and financing sustainable projects. This enhances transparency while helping banks meet regulatory requirements and investor expectations.
In Australia, the Australian Accounting Standards Board (AASB) has published the Australian Sustainability Reporting Standards aligned with ISSB standards, effective from January 01, 2025. In the UK, the Sustainability Disclosure Technical Advisory Committee recommended endorsing IFRS S1 and S2 with minor amendments for alignment with existing legal frameworks.
Canada’s Canadian Sustainability Standards Board released similar disclosure standards effective from January 01, 2025. Singapore’s Exchange Regulation requires issuers to report greenhouse gas emissions based on ISSB standards starting in 2025. Hong Kong’s Institute of Certified Public Accountants published aligned disclosure standards effective August 01, 2025.
South Africa’s Johannesburg Stock Exchange revised its guidance to align with IFRS S1 and S2 but includes exemptions for Scope 3 emissions during the first year of adoption.
As these regulations become embedded globally, banks will access reliable data for risk management and investment decisions. This shift toward standardized disclosures is expected to significantly impact banks’ roles in fostering a resilient global economy.
