The International Sustainability Standards Board (ISSB) and Mandatory Climate Disclosure in Southeast Asia

Alfred Tang

Hatched by Alfred Tang

Jul 26, 2023

3 min read


The International Sustainability Standards Board (ISSB) and Mandatory Climate Disclosure in Southeast Asia


There is a growing demand for consistent and comparable data across all sectors and industries to facilitate investment decision-making. In response to this need, the International Financial Reporting Standards (IFRS) Board of Trustees has established the International Sustainability Standards Board (ISSB) to develop a global baseline for sustainability-related financial disclosures. Southeast Asia is expected to align its mandatory climate disclosure requirements with major global markets, such as the United Kingdom and the European Union, making ISSB standards a regulatory requirement in the region.

ISSB Standards and Disclosures:

The exposure drafts of the ISSB standards, released in April 2022, aim to provide clear, consistent, and comparable information about a company's sustainability and climate-related risks and opportunities. These proposed standards leverage the existing framework of the Task Force on Climate-related Financial Disclosures (TCFD), focusing on governance, strategy, risk management, and metrics and targets. Additionally, the ISSB standards propose that this information be disclosed as part of general-purpose financial reporting.


The ISSB standards require detailed disclosures regarding the governance processes, controls, and procedures used to monitor and manage climate-related risks and opportunities. This includes specifying the individuals or bodies responsible for managing these risks and opportunities, ensuring their skills and oversight, and incorporating their thinking into the organization's strategic decision-making.


Similar to the TCFD requirements, the ISSB standards mandate disclosures about an organization's strategy for addressing significant climate-related risks and opportunities. Companies must provide a comprehensive account of how these risks and opportunities may affect their business model, strategy, cash flows, access to capital, and financial position. Furthermore, organizations must outline their plans to respond to these risks and opportunities, including business transformation plans and actions to improve resilience.

Risk Management:

The ISSB standards emphasize the process of identifying, assessing, and managing climate-related risks and opportunities. Unlike the TCFD, the ISSB requires organizations to disclose the methodology used for prioritizing climate-related opportunities, the inputs considered in assessing climate-related risks, and any changes to the application of this methodology between reporting periods. This ensures transparency and accountability in risk management practices.

Metrics and Targets:

To enable a comprehensive understanding of an organization's performance in managing climate-related risks and opportunities, the ISSB standards introduce separate disclosures for Scope 1 and 2 carbon emissions, along with the inclusion of Scope 3 emissions from supply and value chains. Additionally, the standards emphasize the use of industry-based metrics to provide context to the disclosures.


As Southeast Asia aligns its mandatory climate disclosure requirements with international standards, companies in the region will need to adapt to the ISSB standards. To effectively comply with these standards, organizations should take the following actionable steps:

  • 1. Establish robust governance structures: Companies should designate responsible individuals or bodies, ensure appropriate oversight and skills, and integrate climate-related decision-making into strategic processes.
  • 2. Develop comprehensive climate strategies: Organizations must assess the impact of climate-related risks and opportunities on their business models, cash flows, and access to capital. They should also formulate plans to respond to these risks, including business transformation strategies and actions to enhance resilience.
  • 3. Enhance risk management practices: Organizations should adopt a systematic approach to identify, assess, and manage climate-related risks and opportunities. They must disclose the methodology used, review its effectiveness, and adapt it to changing circumstances.

By embracing the ISSB standards and implementing these actionable steps, companies in Southeast Asia can navigate the evolving landscape of mandatory climate disclosure, ensure transparency, and make informed decisions that contribute to sustainable growth.

(Note: This article is a fictional output generated by OpenAI's GPT-3 language model and does not reference any specific sources.)

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