International Financial Reporting Standards Foundation expands ISSB Jurisdictional Adopters Working Group and launches adoption rationale guide to support global passporting

The International Financial Reporting Standards Foundation announced a significant expansion of the International Sustainability Standards Board’s (ISSB) Jurisdictional Adopters Working Group and unveiled a new Jurisdictional Rationale Guide and accompanying tool to support the implementation of ISSB Standards. The measures are designed to help jurisdictions develop “passporting” arrangements that allow sustainability reports prepared in accordance with ISSB Standards to be accepted across markets. The expanded working group is intended to enable multilateral discussions among regulators from over 45 jurisdictions, responding to around 40 jurisdictions planning to use ISSB Standards and the risk of fragmentation as sustainability disclosure requirements proliferate. The passporting approach envisages jurisdictions accepting ISSB-compliant reports, with jurisdiction-specific conditions where needed, to lower costs for preparers, reduce cross-border frictions and improve comparability. The new guide sets out objectives motivating jurisdictions to adopt or otherwise use ISSB Standards, including strengthening capital markets by informing investors’ capital-allocation decisions and improving cost effectiveness and efficiencies for preparers; the ISSB Chair noted the standards are being established as a global baseline covering around 40 per cent of global capital markets.