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TAC Public Meeting September 2025 Paper 4: Review of SASB Exposure Draft objective and focus areas
Executive summary
| Date | 16 September 2025 |
|---|---|
| Paper reference | 2025-TAC-041 |
| Project | Proposed amendments to SASB Standards |
| Topic | Review of SASB Exposure Draft objective and focus areas |
Objective of the paper
The paper reviews the objective and focus areas of the ISSB's project Enhancing the SASB Standards.
Decisions for the TAC
The TAC is asked for its views on the ISSB's:
- overall objective of enhancing the SASB Standards to support the implementation of IFRS S1 and IFRS S2
- focus on enhancing international applicability; improving interoperability with other sustainability-related standards and frameworks; alignment with the ISSB's research projects on BEES and human capital; and alignment with the IFRS Sustainability Disclosure Standards.
Appendices
Appendix 1 – Summary of drivers for amendments to metrics data
This paper has been prepared by the Secretariat for the UK Sustainability Disclosure Technical Advisory Committee (TAC) to discuss in a public meeting. This paper does not represent the views of the TAC or any individual TAC member.
This publication contains copyright material of the IFRS Foundation® (Foundation). All rights reserved. Reproduced and distributed by the Financial Reporting Council (FRC) in its role as the secretariat for the UK Sustainability Disclosure Technical Advisory Committee (TAC) with the permission of the Foundation. No rights granted to third parties without permission of the Foundation and the TAC. For more information about the Foundation and the rights to use its materials please visit www.ifrs.org
Context
1The ISSB's project Enhancing the SASB Standards involves enhancing the 77 industry-specific SASB Standards. In July 2025, the ISSB published the Exposure Draft Proposed Amendments to the SASB Standards (the SASB Exposure Draft). The SASB Exposure Draft sets out proposed amendments to the SASB Standards in nine of the priority industries: all eight industries in the Extractives sector and one from the Processed Foods industry. The SASB Exposure Draft also proposes targeted amendments to 41 other SASB Standards. The ISSB also published the Exposure Draft Proposed Amendments to the Industry-based Guidance on Implementing IFRS S2, which proposes making consequential amendments to the IFRS S2 Industry-based guidance. The comment period for the exposure drafts closes on 30 November 2025.
2In its July 2025 meeting, the TAC agreed that a principles-based approach to developing its responses would be the best way of influencing the ISSB's project. In this paper, we review the objectives and focus areas of the ISSB's project in the light of the assessment approach set out in TAC paper 2025-TAC-040 Final project management plan and assessment approach. We also consider the objective and focus areas in light of the TAC and FRC's previous positions.
3In the accompanying TAC papers 2025-TAC-042 Initial analysis – Overarching themes and 2025-TAC-043 Analysis of proposed amendments to the nine priority SASB Standards, we analyse the SASB Exposure Draft with a view to understanding whether the proposed amendments are appropriate, taking into consideration the ISSB's objective and stated focus areas.
ISSB's overall project objective and focus areas
4The overall objective of the ISSB's project Enhancing the SASB Standards is to support the implementation of IFRS S1 and IFRS S2. This will be achieved by enhancements to the SASB Standards with the following areas of focus:
- Enhancing international applicability;
- Improving interoperability with other sustainability-related standards and frameworks;
- Amendments related to biodiversity, ecosystems and ecosystem services (BEES) and human capital; and
- Alignment with IFRS Sustainability Disclosure Standards.1
5The enhancements are also intended to enhance the clarity, conciseness and cost-effectiveness for preparers.2
6Our analysis of the Basis for Conclusions on Proposed amendments to the SASB Standards (Basis for Conclusions) found the following drivers for proposed changes, which can be categorised under the focus areas for enhancement:
| Enhancing international applicability | Improving interoperability with other sustainability-related standards and frameworks | Amendments related to BEES and human capital | Alignment with IFRS Sustainability Disclosure Standards | Other enhancements |
|---|---|---|---|---|
| International Applicability | GRI Alignment | BEES Research | IFRS Sustainability Disclosure Standards Alignment | Industry Refresh |
| TNFD Alignment | Human Capital Research | Consistency | ||
| ESRS Alignment | Stakeholder Feedback | |||
| GHG Protocol Scope 2 Guidance Alignment | Clarification | |||
| Technical Correction |
7Amendments are proposed to almost all of the metrics, although the amendments vary in significance. The TAC Secretariat 'tagged' each metric with any drivers attributed to any amendments made by the ISSB as laid out in the Basis for Conclusions. The drivers are not mutually exclusive, and one metric may have multiple amendments made for different reasons, and as such some metrics where tagged with multiple (up to three) drivers. A summary of this data is shown in Appendix 1.
8At its June 2024 meeting, the ISSB discussed its approach to enhancing the SASB Standards. The June 2024 ISSB Staff Paper recommended that the ISSB emphasises the following criteria in prioritising enhancements to the SASB Standards:
- Importance to investors, including focusing on industries with a high market impact.
- Applicability across industries and jurisdictions, including prioritising enhancements to cross-cutting themes.
- Interaction with other projects and the work of other standard-setters, including focusing on BEES and human capital, as well as improving interoperability; and
- Feasibility and complexity, including prioritising projects with achievable outcomes.
9The June 2024 ISSB Staff Paper noted that the project approach could therefore involve prioritising enhancements to a set of industries that overlap with those prioritised by other standard-setters, and supplementing these industry-focused workstreams with a portfolio of other projects that meet urgent investor needs.
10The overall objective of the ISSB's project, as noted, is to support the implementation of IFRS S1 and IFRS S2. The FRC's 2023 response to the ISSB's Request for Information on Agenda Priorities called for the ISSB to prioritise support for the global implementation of IFRS S1 and IFRS S2, and the related ISSB Feedback Statement noted that most stakeholders viewed supporting the implementation of IFRS S1 and IFRS S2 as the highest priority for the ISSB in the next two years.
11The July 2025 Educational Material Using ISSB Industry-based Guidance when applying ISSB Standards, published alongside the SASB Exposure Draft, explains why enhancing the SASB Standards might support the implementation of IFRS S1 and IFRS S2. The Educational Material suggests that the SASB Standards assist an entity in disclosing industry-specific information that is relevant to primary users because they set out disclosure topics and metrics that will typically be applicable for an entity with the business model and associated activities of specific industries. The SASB Standards are therefore 'expected to reduce application costs for entities and assist them in making materiality judgements by focusing on the disclosure of information identified as being likely to be useful to primary users'. The SASB Standards are also 'expected to improve comparability between entities by reducing diversity in reporting practice'.
12However, there may be other activities which we consider to be higher priority than continuing to enhance the SASB Standards. For example, the ISSB could alternatively use its resources to progress its research projects on BEES and human capital, and any standard-setting or guidance that may arise from those projects.
13In developing the TAC's responses, the TAC Secretariat is currently conducting stakeholder outreach and research activities. These include asking stakeholders for their views on the ISSB's overall objective of enhancing the SASB Standards to support the implementation of IFRS S1 and IFRS S2. The findings of these activities will be shared with the TAC at a future meeting.
14The SASB Exposure Draft asks:
- Do you agree with the objective of the proposed amendments to the SASB Standards (i.e. to support the implementation of IFRS S1 and IFRS S2) and related areas of focus?
- Do the proposed amendments meet this objective? Why or why not?
Enhancing international applicability
15The ISSB's aim is to enhance the international applicability of industry groupings, disclosure topics, metrics and supporting technical protocols. In the TAC Secretariat's analysis of the Basis for Conclusions, summarised in Appendix 1, amendments are proposed to 4% of the total metrics with the aim of enhancing international applicability.
16The FRC's 2023 response to the ISSB Exposure Draft Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates noted that disclosure topics, metrics and supporting technical protocols contained within the SASB Standards were developed using research based on the US market and may therefore not be fully applicable across all jurisdictions. The response recommended that the ISSB 'conduct research across a wide selection of markets in collaboration with national standard setters to understand the jurisdictional-specificity of sustainability-related matters and update the disclosure topics and metrics accordingly'.
17The December 2024 ISSB Staff Paper noted that of the sector-specific bilateral engagements, 45% were in North America and 33% were in Europe. This indicates that the amendments made to the SASB Standards for the purpose of enhancing international applicability might not meet the objective. For the standards to be internationally applicable, further research might need to be conducted in areas outside North America and Europe. We are also mindful that UK-based investors invest globally and global companies are headquartered in the UK, so being internationally applicable is key for the UK market. We recognise that the current consultations are a way of obtaining further jurisdictional views and therefore welcome the extended comment period. However, we query whether there was enough engagement with such stakeholders during the development of the proposals, particularly given the absence of public deliberations on the technical content in ISSB meetings during the development of the SASB Exposure Draft.
18While the ISSB has issued international standards to serve as the 'global baseline', the TAC has responsibility to undertake outreach with, and provide a focal point for, UK stakeholders to influence the technical development of IFRS Sustainability Disclosure Standards. Our stakeholder outreach and research activities are therefore focused on the UK, with a view to ascertaining the applicability of the SASB Standards in the UK from the perspectives of both users and reporters.
Improving interoperability with other sustainability-related standards and frameworks
19The ISSB's aim is to improve interoperability while ensuring continued focus on investor needs. The SASB Exposure Draft notes that the ISSB has identified possible amendments that would enhance the interoperability and alignment of the SASB Standards with other sustainability-related standards and frameworks, such as the Global Reporting Initiative (GRI) Standards, European Sustainability Reporting Standards (ESRS), and the recommendations published by the Taskforce on Nature-related Financial Disclosures (TNFD). The SASB Exposure Draft further notes that the ISSB's continued focus is on the needs of primary users of general purpose financial reports.
20In the TAC Secretariat's analysis of the Basis for Conclusions, summarised in Appendix 1, amendments are proposed to 18% of the total metrics to improve GRI consistency, 1% to improve ESRS alignment, and 7% to improve TNFD alignment.
21Appendix B of the Basis for Conclusions provides an overview of significant proposed amendments that would enhance interoperability with the GRI Standards and alignment with TNFD disclosure recommendations.
22In its report UK endorsement of IFRS S1 and IFRS S2, the TAC supported continued efforts towards greater global alignment and interoperability of the IFRS Sustainability Disclosure Standards with other sustainability reporting frameworks and standards, notably with the ESRS. The report states:
‘With the range of requirements required by other jurisdictions (some ISSB-based, but others using different reporting frameworks or standards), there is a risk that international comparability is compromised and the quality of decision-useful information decreases. Both reporting entities and users of general purpose financial reports will benefit from increased interoperability, and therefore the TAC supports the global baseline and greater alignment between IFRS Sustainability Disclosure Standards and jurisdictional reporting requirements around the world.'
23The TAC also recognised in its report that one of the key challenges with interoperability is the different approaches to materiality and identifying sustainability-related matters that are taken by different reporting frameworks and standards, notably with ESRS. The TAC therefore recommended that the UK Government engages with the ISSB and EFRAG on the key challenges for UK entities that will be disclosing information in accordance with multiple frameworks with the objective of supporting UK entities in meeting their disclosure obligations.
24The ISSB's approach to improving interoperability includes consideration of:
- the objective of meeting investor needs for decision-useful information, while taking into account the cost for preparers;
- relevance for the activities of entities in an industry;
- international applicability; and
- how other standards and frameworks could help address stakeholder feedback on possible improvements to the priority SASB Standards.3
25For example, the March 2025 ISSB Staff Paper noted that stakeholders raised concerns about the metrics regarding water withdrawal and consumption and the ISSB Staff believed that solutions could be found in other standards and frameworks, including GRI and TNFD.
26The TAC has already indicated that improving interoperability is an important focus for the ISSB. Given the number of possible sustainability-related standards and frameworks that the ISSB could consider, we support the ISSB's focus on alignment with GRI and ESRS as these are the two most prominent. We also note that, as summarised in the TAC paper TAC-Update-Sept-2025, EFRAG's ongoing simplification of the ESRS might have implications for alignment, with mixed views about whether proposed simplification changes would ultimately enhance or weaken interoperability.
27We may also welcome the ISSB's focus on alignment with TNFD. However, as noted in the section Amendments related to BEES and human capital below, alignment may be premature given the ISSB's research project on BEES has not been completed yet.
28Our stakeholder outreach and research activities include considering whether investors, preparers and other stakeholders view the alignment with other sustainability-related standards and frameworks to be improvements.
Amendments related to BEES and human capital
29The ISSB's aim is to align the enhancements with the ISSB's research projects on BEES and human capital and to enable feedback on the SASB Exposure Draft to provide input to those research projects. The SASB Exposure Draft notes that the ISSB is seeking to understand the extent to which the SASB Standards, and the proposed amendments, meet user needs for information on risks and opportunities related to BEES and human capital. In the TAC Secretariat's analysis of the Basis for Conclusions, summarised in Appendix 1, amendments are proposed to only 0.5% of the total metrics to align with BEES research and 2% to align with human capital research.
30The March 2025 ISSB Staff Paper noted that the research projects provided useful insights on whether risks and opportunities could be considered industry-specific or industry-agnostic. The ISSB Staff Paper noted that stakeholders have indicated that there are aspects of human capital such as employee engagement, recruitment and retention – that could be reasonably expected to affect the prospects of entities regardless of their industry. However, the ISSB Staff believed that the ISSB should not dedicate significant resources to developing SASB Standards content regarding industry-agnostic topics and associated metrics as the ISSB's research project – and any standard-setting or guidance that may arise from that project – is likely to be better placed to address disclosures regarding industry-agnostic risks and opportunities. The focus in relation to the SASB Standards is therefore on the industry-specific topics and associated metrics.
31The ISSB's focus on aligning the enhancements with the ISSB's research projects on BEES and human capital seems to be unusual. It is difficult to comment on the proposed amendments to the SASB Standards in relation to BEES and human capital when the ISSB's research projects have not been completed yet and we do not know whether any standard-setting or guidance will arise from those projects. If the research so far has identified quick fixes that can be made to the SASB Standards in relation to BEES and human capital, then the approach could be a good solution. However, further changes to the SASB Standards in relation to BEES and human capital might be required on completion of the ISSB's research projects.
32The TAC's stakeholder outreach and research activities are prioritising issues on climate, however, we are also open to considering issues on BEES and human capital, particularly if raised by stakeholders. If any concerns emerge about the proposed amendments related to BEES and human capital, we will explore these further. The TAC could also include concerns about the ISSB's aim in its comment letters.
Alignment with IFRS Sustainability Disclosure Standards
33The ISSB's aim is to align the language and concepts with the IFRS Sustainability Disclosure Standards. We found that 22% of metrics were amended to improve alignment with the IFRS Sustainability Disclosure Topic, making it the second most common reason for amendments behind stakeholder feedback (attributed to amendments to 50% of metrics; refer to Appendix 1). The Basis for Conclusions notes that the ISSB has drafted the proposed amendments under the assumption that an entity would apply the SASB Standards alongside IFRS Sustainability Disclosure Standards, and avoids unnecessary duplication of requirements that are already included in IFRS S1 and IFRS S2. The proposed amendments therefore:
- do not repeat the 'core content' (governance, strategy, risk management, metrics and targets) in IFRS S1 for every sustainability-related risk and opportunity identified in the disclosure topics;
- do not repeat disclosures already required by IFRS S1 and IFRS S2;
- are intended to complement IFRS Sustainability Disclosure Standards by identifying industry-specific information related to the core content for sustainability-related risks and opportunities that are likely to be relevant for a particular industry; and
- set out particular disaggregation of disclosures required within IFRS S1 or IFRS S2 that are likely to be relevant to an industry, given feedback from investors and preparers in that industry.4
34We note that one of the proposed amendments within the eight priority standards in the Extractives sector, under the Greenhouse Gas (GHG) emissions disclosure topic, is for entities to consider reporting their Scope 1 GHG emissions in accordance with IFRS S2, paragraph 29(a). The ISSB's view is that Scope 1 emissions represent a significant component of total emissions in these eight priority industries, thereby justifying an industry-specific disclosure requirement. However, IFRS S2 already requires disclosure of Scope 1 emissions when material, raising questions about how this additional requirement aligns with the ISSB's intention of avoiding duplication of provisions already contained within IFRS S1 and IFRS S2. If this approach were to be extended to other industries, for example Financial Services, where Scope 3 emissions are typically the most material, it is unclear whether the Financial Services SASB Standards will require the same disclosures on financed emissions that are already in IFRS S2. It could be the case that this is intended for companies that use SASB as standalone standards and not complementary to IFRS S1 and IFRS S2. However, the Basis for Conclusions is not clear on the rationale.
35The Basis for Conclusions also notes that the proposed amendments are not intended to restrict the reporting of entities that apply the SASB Standards without also applying IFRS Sustainability Disclosure Standards, and that important aspects of IFRS Sustainability Disclosure Standards have been cross-referenced in the SASB Standards.5
36Our stakeholder outreach and research activities are considering whether the changes complement, rather than repeat, the information in IFRS S1 and IFRS S2 and whether investors, preparers and other stakeholders view the disclosures as being relevant to each industry. While contrary to the ISSB's intentions, where overlaps in information are highlighted, they are unlikely to result in additional work for preparers. We will also use our stakeholder outreach and research activities to consider whether entities that apply the SASB Standards without also applying IFRS Sustainability Disclosure Standards have any concerns about the changes.
Questions for the TAC
- What are the TAC's views on the ISSB's overall objective of enhancing the SASB Standards to support the implementation of IFRS S1 and IFRS S2?
- Does the TAC agree enhancing the SASB Standards is an appropriate way to achieve prioritisation of support on the implementation of IFRS S1 and IFRS S2?
- Does the TAC support the ISSB's focus on enhancing international applicability, improving interoperability with other sustainability-related standards and frameworks, alignment with the ISSB's research projects on BEES and human capital and alignment with the IFRS Sustainability Disclosure Standards?
- Does the TAC believe any other objectives or areas of focus should be incorporated into the project to enhance the SASB Standards?
Appendix 1 - Summary of drivers for amendments to metrics data
Presented in order of commonality.
| Driver | Number of metrics amended (/217) | Percentage of metrics amended |
|---|---|---|
| Stakeholder Feedback* | 109 | 50% |
| IFRS alignment | 48 | 22% |
| GRI alignment | 40 | 18% |
| Consistency | 26 | 12% |
| Unexplained | 19 | 9% |
| TNFD alignment | 15 | 7% |
| International applicability | 9 | 4% |
| Industry refresh | 6 | 3% |
| Clarification | 5 | 2% |
| Human capital research | 5 | 2% |
| ESRS alignment | 2 | 1% |
| BEES research | 1 | 0.5% |
| Technical correction | 1 | 0.5% |
* For some metrics the Basis for Conclusions specifies that feedback is from investors and/or reporting entities and for others it refers to feedback from stakeholders more generally.