Hot Topic | December 2021



ISSB gets running start with prototype disclosures

Top 10 questions on the general sustainability and climate prototypes, plus why US companies should pay attention.

Julie Santoro

Julie Santoro

Partner, Dept. of Professional Practice, KPMG US

+1 212-954-1086

The Technical Readiness Working Group (TRWG) was formed from various sustainability standard-setting bodies to give the International Sustainability Standards Board (ISSB) a foundation to build upon; read our Defining Issues. Prototype standards issued by the TRWG give preparers a glimpse into what the future of sustainability disclosures might hold.


  • US companies monitoring international ESG reporting developments

Relevant dates

November 3, 2021:

  • ISSB formed by the IFRS® Foundation
  • TRWG issued prototype general sustainability and climate disclosure standards 

Key impacts

Prototype standards on climate-related disclosures and general requirements for sustainability disclosures are now available; they are based on existing frameworks and standards, including TCFD and SASB.

The prototypes provide an indication of the disclosures that may soon be required under IFRS® Sustainability Disclosure Standards, providing a sense of direction for enterprise value-focused sustainability reporting.

"The upcoming ISSB disclosure standards provide a compass for companies and investors, pointing to consistency and comparability in sustainability disclosures. Credible ESG reporting is rooted in a comprehensive story that connects financial performance with rigorously tracked metrics and transparent progress on your environmental, social and governance activities. Every company – public or private, US or global – can use the ISSB as a starting point for its journey. For more mature reporters, these standards can help bring order to the chaos. In the end, access to capital will depend on how you articulate your ESG performance. Prepare. Now.”

— Maura Hodge, KPMG IMPACT Audit Leader

What’s the impact?

  • Companies applying these standards will need processes and controls in place to provide sustainability information of the same quality and timeliness as their financial information.
  • Getting ready now is critical even if the final standards are not identical to the prototypes. Companies that are already producing similar sustainability-related information are likely to find reporting under the final standards easier, even if the information is not published.

What’s next?

  • The first two standards may be issued as soon as H2 2022. Individual jurisdictions will decide whether and when to adopt them.  
  • With strong support from IOSCO, a rapid route to full adoption is expected in a number of jurisdictions. In some jurisdictions, the standards will provide a baseline. 
  • Some public and private companies may choose to adopt them voluntarily – e.g. in response to investor or societal pressure.

As a US company, why should you pay attention?

We expand on these key points:

  • Anticipated US regulation: proposals are expected in Q1 2022.
  • SEC rules inspired by the same frameworks and standards: the prototypes provide an idea of the type of climate disclosures that might be included in the SEC proposals.
  • Market demand toward a global baseline: a company may be called on, or may decide voluntarily, to comply with the future ISSB standards.

Top 10 questions

We answer these questions:

  1. What’s the purpose of the prototypes?
  2. What are they based on?
  3. How and when could they affect you?
  4. What would need to be disclosed? 
  5. Would they require scenario analysis?
  6. Where would the information be disclosed? 
  7. What about topics other than climate?
  8. What if you’ve already adopted other frameworks?
  9. What do they mean for broader sustainability reporting?
  10. What do you need to do now?


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