ISSB standards and ESRS compared

ISSB vs ESRS: what are the main differences?

The ISSB standards are a global baseline that jurisdictions adopt, often climate first. The ESRS are EU law for companies in scope of the CSRD, and cover a fixed set of topics, each reported if material. See IFRS S1 and the revised ESRS.

How does materiality differ?

Under IFRS S1, information is material if omitting, misstating or obscuring it could reasonably be expected to influence investors' decisions. ESRS financial materiality is designed to be aligned with that, so an ESRS financial materiality assessment should identify the climate information IFRS S2 treats as material. The ESRS add impact materiality: a company also reports on matters where its impacts on people or the environment are material, even if they have no financial effect on it. See double materiality explained. See financial materiality and impact materiality.

How do IFRS S2 and ESRS E1 compare on climate?

Both require governance, strategy, risk management and metrics and targets; scope 1, 2 and 3 emissions under the GHG Protocol; transition plans where they exist; resilience; and anticipated financial effects. ESRS E1 also requires market-based scope 2, energy consumption and mix, and more detail on carbon credits and removals. IFRS S2 requires scenario analysis to assess resilience, industry-based metrics drawn from the SASB Standards, and specific financed emissions information for banks, insurers and asset managers. See ESRS E1 and IFRS S2. See financed emissions and PCAF.

ISSB vs ESRS in practice: a group reporting under both

An EU-listed engineering group prepares an ESRS sustainability statement and must also meet AASB S2, Australia's climate standard based on IFRS S2, for a subsidiary listed there. Following the interoperability guidance, it starts from its ESRS work and adds:

• the key assumptions and dependencies of its transition plan not already covered by ESRS E1;
• a climate scenario analysis suited to its circumstances, stating whether it covered a diverse range of scenarios, physical and transition, and its key assumptions;
• industry-based metrics from the IFRS S2 industry guidance for its sector, because the ESRS have no sector standards;
• both disaggregations of emissions where the standards require different ones;
• a check that its disclosures on climate opportunities, capital deployment and carbon credits meet IFRS S2.

Its emissions, targets and governance disclosures serve both reports unchanged. See climate scenario analysis.

How does assurance differ?

ESRS sustainability statements need limited assurance under the CSRD, and the move to reasonable assurance was dropped by the Omnibus. The ISSB standards say nothing about assurance; each adopting jurisdiction decides, and many phase it in, starting with scope 1 and 2 emissions, as in Japan and Singapore, or from the second year of reporting, as in Pakistan. A group reporting under both should plan one assurance approach that satisfies the stricter regime. See limited and reasonable assurance.

Did the revised ESRS bring the two closer?

Yes, in several ways: the revised ESRS allow GHG Protocol consolidation approaches used under IFRS S2, give more flexibility on anticipated financial effects, allow ranges, and focus disclosures on material information. Differences in scope and materiality remain by design. The ESRS for non-EU groups, published as drafts in July 2026, keep impacts and leave out financial risks, the opposite emphasis to the ISSB standards. See the CSRD for non-EU companies.

Which should a company report under?

Usually the law decides: EU companies in scope of the CSRD use the ESRS, and companies listed in adopting jurisdictions use the local version of the ISSB standards. Groups caught by both should run one materiality assessment, one emissions inventory and one data process, and map outputs to each standard, rather than run two programmes. See ISSB adoption by country, the GRI Standards and GRI and the ISSB.

This guide is general information. It is not tax or legal advice for your situation.