ISSB Proposes Amendment for Sustainability Disclosure Standards

The enormity of climate change impacts underscores the urgency for businesses to participate in taking climate action. Various sustainability disclosure standards have been established, including the International Sustainability Standard Board’s IFRS standards. In April 2025, the board introduced the plan for the IFRS S2 amendment. What does this change entail?

Sustainability Disclosure Standards for Businesses

Businesses have begun adopting environmental, social, and governance (ESG) disclosure to measure the sustainability impacts of their operations. In 2023, the International Sustainability Standard Board (ISSB) issued the IFRS S1 and IFRS S2, sustainability disclosure standards to help increase trust and confidence in companies’ sustainability and help make informed investment decisions.

IFRS S1 provides requirements to enable companies to communicate sustainability-related risks and opportunities to investors. Meanwhile, IFRS S2 specifically sets out climate-related disclosures, including the company’s governance process, strategies, and performance in climate-related risks, opportunities, and targets. Both standards are designed to be published in the same reporting package as companies’ financial statements.

Amendment for IFRS S2

The IFRS S2 is effective for annual reporting periods beginning on or after January 1, 2024. In April 2025, the ISSB proposed to amend IFRS S2 for easier application of greenhouse gas emissions disclosures. This amendment was proposed based on stakeholder and market feedback.

The proposed amendments include easing the Scope 3 category 15 disclosures, which is the category for the greenhouse gas emissions arising from the company’s financial investment-related activities. The proposed amendment also allows the usage of different measurement methods other than the Greenhouse Gas Protocol for measuring GHG emissions. Ultimately, the ISSB underscores that this change aims to help companies implement the sustainability disclosure standards and not to reduce disclosures about GHG emissions.

“As a market-focused standard-setter, we have taken steps to respond in a timely manner by proposing targeted amendments helping preparers where possible, without causing too much disruption and ensuring that our Standards continue to enable the provision of decision-useful information to investors,” said Sue Lloyd, the Vice-Chair of ISSB.

Responsible Business Conduct

The exposure draft is open for comments until June 27, 2025. After gathering stakeholder feedback on the exposure draft, the ISSB aims to finalize the amendment by the end of 2025.

Disclosing sustainability risks, opportunities, and impacts is one of the ways businesses can participate in halting the climate crisis and reducing the impacts that follow. Ensuring the widespread adoption of sustainability disclosure standards for businesses at all levels, including MSMes, is essential, especially as the pace of the crisis accelerates. This requires strong governance and will from company leaders, as well as enabling systems and frameworks from governments and organizations.

Editor: Nazalea Kusuma

Kresentia Madina

Reporter at Green Network Asia | Website | + posts

Madina is the Assistant Manager for Digital Publications at Green Network Asia. She graduated from Universitas Indonesia with a bachelor's degree in English Literature. She has three years of professional experience working on GNA international digital publications, programs, and partnerships particularly on social and cultural issues.