Making sense of ISSB: Navigating climate regulation, compliance and reporting in Southeast Asia

There has been growing pressure from investors and financial institutions on the need for more consistent and comparable data across all sectors and industries to support investment decision making. The International Sustainability Standards Board (ISSB) was set up by the International Financial Reporting Standards (IFRS) Board of Trustees to develop a consistent global baseline for sustainability-related financial disclosures.

Over time we anticipate that Southeast Asia will continue to align mandatory climate disclosure requirements with major global markets including the United Kingdom and the European Union and that the ISSB standards will become a regulatory requirement in some jurisdictions.

Standardising sustainability and climate disclosures is a critical step to accelerating the transition to a net zero future. For most Southeast Asian organisations, meeting these reporting standards will require a step change in the how they measure, model, assess and report – which in itself can be a catalyst for change.

The standards are about so much more than disclosure – with an emphasis on the future and the most material risks to enterprise value - ISSB is fundamentally about strategy. It will support continued access to capital and improved decision making in assessing the impact of climate and other material sustainability risks on the business.

It also provides the opportunity to integrate these considerations into existing governance mechanisms and capital allocation decisions. It will require a commensurate investment in systems to support better and more timely access to climate and sustainability data.