Global developments

International sustainability disclosure standards

The International Sustainability Standards Board (ISSB) issued its first two standards in 2023, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; and IFRS S2 Climate-related Disclosures. The ISSB was set up by the IFRS Foundation to develop a comprehensive and consistent global baseline for sustainability reporting including climate-related disclosures. The TCFD recommendations form the core of the climate standard IFRS S2.

IFRS S1 and S2 commenced for annual reporting periods beginning on or after 1 January 2024, with transition relief to allow entities to report only on climate-related risks and opportunities in accordance with IFRS S2 in the first year they apply IFRS S1 and S2. The ISSB has included application guidance within an Appendix B to both IFRS S1 and S2 and is developing further resources to support implementation, available from the IFRS Foundation website.

Access the ISSB’s standards and supporting resources from the IFRS Foundation.

Prepare now: read CA ANZ and Deloitte’s practical guidance on preparing for the ISSB’s sustainability disclosure standards.

TCFD

In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) released recommendations for voluntary climate-related disclosures by entities. These disclosures were designed so entities provide information to investors, lenders and insurance underwriters about their climate-related financial risks. The four core recommendations and eleven recommended disclosures published by the TCFD are consistent with the requirements in IFRS S2.  The TCFD has now been disbanded and the ISSB builds on its legacy. 

Read the IFRS Foundation’s comparison of requirements in IFRS S2 and the TCFD recommendations.  

Read our brief explainer on the TCFD’s recommendations.

Australia

Mandatory climate-related financial disclosures commenced on 1 January 2025 for certain large entities and will be phased in for other entities by 2027-28. The Australian Government has indicated, in its sustainable finance strategy, a ‘climate first’ approach to sustainable finance reforms. 

The AASB has published Sustainability Reporting Standards, AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information [voluntary] and AASB S2 Climate-related Disclosures. has published ASSA 5000 General Requirements for Sustainability Assurance Engagements and ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001 with both standards operative for financial reporting periods beginning on or after 1 January 2025.

ASIC has published RG 280 Sustainability reporting, a guide for entities required to prepare a sustainability report under Ch 2M of the Corporations Act.

New Zealand

The eXternal Reporting Board (XRB) released the Aotearoa New Zealand Climate Standards in December 2022. Around 200 of New Zealand’s most economically significant entities were required to report against these standards from 1 January 2023. The XRB’s standards are aligned with the TCFD recommendations, and the XRB has published a comparison document comparing Aotearoa New Zealand Climate Standards (NZ CS) with IFRS S1 and S2. The Financial Markets Authority (FMA) has published guidance for Climate Reporting Entities (CREs) on meeting their record keeping obligations.

In October 2025 the New Zealand Government announced the following changes to the climate-related disclosure regime:

• The mandatory climate reporting threshold for listing companies increases from $60 million market capitalisation to $1 billion
• Managed investment scheme managers will be removed 
• The number of CRD reporting entities reduce from around 164 to 76 

Other jurisdictions

Internationally many other jurisdictions require or are introducing mandatory sustainability-related disclosures, including the European Union (EU), Singapore, Canada, Japan  and Malaysia. These requirements may impact on entities based in Australia or New Zealand if they trade with, are listed or operate in these jurisdictions.

Canada

Canada’s Sustainability Standards Board (CSSB) released its first Canadian Sustainability Disclosure Standards (CSDS 1 and CSDS 2) in 2025, aligned with IFRS S1 and S2. These voluntary standards guide companies in disclosing sustainability-related financial and climate information. However, the Canadian Securities Administrators (CSA) have paused efforts to implement mandatory climate reporting due to global economic uncertainty. Finance professionals should prepare for future regulatory shifts, monitor evolving disclosure expectations, and align ESG data with international frameworks to meet investor demands and enhance transparency.

Europe

The EU’s Corporate Sustainability Reporting Directive (CSRD), effective from 2024, mandates ESG disclosures for large companies, listed SMEs, and non-EU firms with significant EU operations. Reports follow European Sustainability Reporting Standards (ESRS), based on double materiality. To support smaller businesses, the EU introduced the Voluntary Sustainability Reporting Standard for SMEs (VSME) in July 2025. Developed by EFRAG, VSME simplifies ESG disclosures for non-listed SMEs, helping them meet growing demands from investors and large corporations without the complexity of CSRD. Keep up to date with the ESRS.

Japan

In March 2025, Japan’s Sustainability Standards Board (SSBJ) released its inaugural Sustainability Disclosure Standards, aligned with IFRS S1 and S2 from the ISSB. These standards mandate listed companies to disclose governance, strategy, risk management, and metrics related to sustainability and climate, including carbon emissions and transition risks. The framework ensures international comparability and supports investor confidence. 

Malaysia

Malaysia launched its National Sustainability Reporting Framework (NSRF) in September 2024, aligning with global standards like ISSB, TCFD, and GRI. As of 2025, Bursa Malaysia mandates ESG disclosures for all listed companies, including Scope 1, 2, and 3 emissions, governance practices, and climate risks. Financial institutions regulated by Bank Negara Malaysia must also comply with updated climate risk policies. The NSRF introduces phased implementation and assurance requirements to support transparency and comparability. Finance professionals must integrate ESG data into financial reporting, risk analysis, and investor communications, ensuring readiness for evolving regulatory expectations.

USA

In the U.S., sustainability and climate reporting is evolving through federal and state initiatives. The SEC’s proposed climate disclosure rule would require public companies to report Scope 1 and 2 emissions, climate risks, and governance, though implementation remains uncertain. California leads with its Climate Accountability Package, mandating Scope 1–3 emissions disclosures for large companies from 2026. 

Singapore

Starting FY2025, all listed companies in Singapore must disclose Scope 1 and 2 greenhouse gas emissions, aligned with ISSB standards. Straits Times Index constituents will lead in adopting broader climate-related disclosures, including Scope 3 from FY2026. Large non-listed companies will follow from FY2027. The Accounting and Corporate Regulatory Authority (ACRA) and SGX RegCo have extended implementation timelines to support reporting readiness and external assurance. 

South Korea

South Korea is advancing ESG transparency through the Korean Sustainability Disclosure Standards (KSDS), developed by the Korea Sustainability Standards Board (KSSB). Built on IFRS S1 and S2, KSDS mandates disclosures on sustainability-related risks, opportunities, governance, strategy, and emissions that materially impact financial performance. The final standards and implementation roadmap are expected in 2025, with phased adoption for listed companies. ESG reporting will be integrated into financial disclosures, emphasizing climate risk and investor relevance.