The issuance of the inaugural standards, IFRS S1 and IFRS S2, by the International Sustainability Standards Board (ISSB), marks a significant milestone in the realm of sustainability-related disclosures across global capital markets. These standards aim to enhance trust and confidence in company disclosures regarding sustainability, thereby assisting investors in making informed decisions.

For the first time, the standards establish a shared framework for disclosing the impact of climate-related risks and opportunities on a company's future prospects.

The objective of IFRS S1 is to compel entities to disclose information about their sustainability-related risks and opportunities, which can be valuable for users of general-purpose financial reports when deciding whether to allocate resources to the entity. IFRS S1 necessitates the disclosure of all sustainability-related risks and opportunities that could reasonably be anticipated to influence the entity's cash flows, access to financing, or cost of capital in the short, medium, or long term. These collectively refer to as 'sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects.'

The objective of IFRS S2 is to require entities to disclose information about their climate-related risks and opportunities, which is deemed useful for users of general-purpose financial reports when making decisions related to providing resources to the entity. IFRS S2 mandates the disclosure of climate-related risks and opportunities that could reasonably be expected to impact the entity's cash flows, access to financing, or cost of capital over the short, medium, or long term. These collectively refer to as 'climate-related risks and opportunities that could reasonably be expected to affect the entity's prospects.'

CDP has made the decision to integrate the climate-related disclosure standard developed by the ISSB into its worldwide environmental disclosure platform. Given that 18,700 companies, representing half of the global market capitalization, disclosed environmental information through CDP in 2022, this incorporation will result in a swift and extensive early adoption of ISSB climate data disclosure throughout the global economy. This strategic move will enhance the coherence of climate-related information available to investors and alleviate the disclosure burden on entities by aligning requirements.