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TAC Public Meeting September 2025 Paper 5: Overarching themes
UK Sustainability Disclosure Technical Advisory Committee
AGENDA PAPER 5
Executive summary
| Date | 16 September 2025 |
| Paper reference | 2025-TAC-042 |
| Project | Proposed amendments to SASB Standards |
| Topic | Initial analysis – Overarching themes |
Objective of the paper
The paper explores overarching themes that have been identified in desk-based research concerning the ISSB's project Enhancing the SASB Standards.
Decisions for the TAC
The TAC is asked for its views on:
- the status of, and the ISSB's intentions for, the SASB Standards, including associated due process;
- recommendations to enhance transparency and supporting analysis of the SASB's Exposure Draft;
- the industry groupings in SICS and the priorities for enhancements to them;
- the use of a phased approach to enhance the SASB Standards, including the selection of the 12 priority industries, and the targeted amendments;
- making climate-related amendments and, in particular, making consequential amendments to the IFRS S2 industry-based guidance; and
- the effective date.
Appendices
None.
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
1In its July 2025 meeting, the TAC agreed that its approach to responding to the ISSB's Exposure Drafts on SASB enhancements would entail reviewing and commenting on the principles and methodology underpinning the project. This paper therefore explores general overarching themes as they relate to this.
Status of and intentions for the SASB Standards, including the due process
2The FRC's 2023 response to the ISSB's Request for Information on Agenda Priorities recommended that the ISSB considers and communicates the envisaged architecture of the full suite of standards, including the industry-based materials. The FRC's March 2025 response to Exposure Draft IFRS/DPH/ED/2024: Proposed Amendments to the IFRS Foundation Due Process Handbook noted that UK stakeholders and the TAC generally welcomed the SASB Standards, but raised concerns where materials were not developed using the same conceptual basis, and have not been or are not subject to the usual IFRS Foundation due process. The FRC stated that it did not agree with the proposed due process requirements for the SASB Standards, and was concerned in particular about the SASB Standards being developed 'in private' and only ratified in public. The FRC therefore encouraged the IFRS Foundation to give greater consideration to enabling stakeholders to contribute to the development of the SASB Standards, and the incorporation of industry-based disclosure requirements into IFRS Sustainability Disclosure Standards. The FRC further stated that it would value greater clarity from the ISSB and the IFRS Foundation on the status of, and intentions for, the SASB Standards and the incorporation of industry-based disclosure requirements into IFRS Sustainability Disclosure Standards. It noted that in principle, if the SASB Standards were to have the same status as IFRS Sustainability Disclosure Standards, it would expect them to be subject to the same level of due process as IFRS Sustainability Disclosure Standards.
3The project to review the Due Process Handbook is still underway and the project direction is not expected to be decided until October 2025. However, the due process being applied in the ISSB's project to enhance the SASB Standards continues to be consistent with the proposed due process in the Exposure Draft IFRS/DPH/ED/2024: Proposed Amendments to the IFRS Foundation Due Process Handbook.
4The FRC therefore further emphasised the points it made in its response to the consultation on proposed changes to the Due Process Handbook in its June 2025 letter to the ISSB's Chair on the comment period for the SASB Exposure Draft. It noted that the absence of public deliberations on the technical content during the development of the SASB Exposure Draft meant stakeholders were not as familiar with the rationale for the proposals, substantiveness of the changes and any points of contention as they would have been otherwise. The TAC and PIC Chairs also sent a June 2025 letter to the ISSB Chair on the comment period for the SASB Exposure Draft, which referenced the FRC letter and stressed the TAC's guiding principle of providing a focal point for UK stakeholders and the TAC's responsibility to undertake outreach with UK stakeholders.
5Paragraphs BC22 to BC26 of the Basis for Conclusions explain the due process for amending the SASB Standards. They note that the Due Process Oversight Committee (DPOC) sought to balance the need for a transparent and inclusive due process, given the importance of the SASB Standards in supporting the application of IFRS S1 (and IFRS S2), with the fact that IFRS S1 does not require entities to apply the SASB Standards (and IFRS S2 does not require entities to apply the IFRS S2 industry-based guidance).
6In its July 2025 meeting, the TAC agreed that the TAC's response should refer to comments previously raised by the FRC and DBT about the due process for amending the SASB Standards.
7The July 2025 Educational Material Using ISSB Industry-based Guidance when applying ISSB Standards stresses that 'applying the guidance is not mandatory to assert compliance with ISSB Standards'. Discussions with the ISSB confirmed that if the content of the SASB Standards were to become a mandated part of the ISSB Standards, this is something that they would be required to consult on in accordance with the due process that applies to all amendments to IFRS Sustainability Disclosure Standards.
Questions for the TAC
- What are the TAC's views on the ISSB's status of and its intentions for the SASB Standards, including the due process?
Transparency & Supporting Analysis for Amendments
8To build stakeholder confidence in any proposed amendments to the SASB Standards, it is essential that the ISSB provides clear, accessible documentation to accompany any changes. In this instance—and in future cases—stakeholder understanding and analysis could be strengthened by undertaking the following:
- Providing a gap analysis between SASB disclosure topics and metrics and other frameworks to identify differences, and providing an explanation as to why these topics/metrics are not needed in the SASB Standards, or are different (presumably because they do not meet the test of being decision-useful for investors).
- Sharing an analysis of desk research to see which metrics are commonly adjusted or omitted by companies and the reasons why – particularly if it was considered that they were not relevant to specific geographies, and if there were common alternatives being used, including those from other reporting standards/frameworks.
- Providing tables similar to those published by EFRAG, with logs of amendments showing the proposed revision and reason for it. This would be more accessible than the narrative provided in the Basis for Conclusions and would provide reassurance that a reason has been given for each amendment. This would also be useful for the purpose of understanding the most common reasons for amendments.
- Providing summaries of stakeholders the ISSB has engaged with, even if by group, e.g., number of companies in each industry, where they are based, and stakeholder type. This would provide more assurance that the project has truly incorporated international perspectives – one of the areas of focus.
- Explaining key omissions in relation to disclosure topics with a view to providing a more holistic cross-industry picture, particularly within a sector. It is unclear, for example, why certain topical disclosures from some SASB Standards which would appear to be relevant to others, are not included within those other SASB Standards in the Exposure Draft. For example, air quality is included as a disclosure topic for all standards in the Extractives sector, save for the Coal Operations SASB Standard, yet no explanation is provided for this.
9It is recommended to the TAC that the above matters are highlighted to the ISSB in the TAC's response, particularly given that further draft standards are due to be released in late 2025.
Questions for the TAC
- Does the TAC agree that the above recommendations should be made in the TAC's response letter to the ISSB? And does it have any additional comments or observations about them?
Industry classification system
10At its May 2024 meeting, the ISSB discussed the Sustainable Industry Classification System (SICS). The May 2024 ISSB Staff Paper notes that industry classification systems are used to group entities based on activities, products, or other characteristics, and that there are two main types – official systems based on economic activities, such as the International Standard Industrial Classification of All Economic Activities (ISIC), and market-based systems used for financial analysis, such as the Global Industry Classification Standard (GICS). SICS adopted a 'sustainability-related approach' for industry groupings.
11The ISSB Staff Paper goes on to note that stakeholders have expressed concerns about comparability across systems, SICS's applicability in international contexts, and challenges for entities with complex or diverse activities. Suggestions included aligning SICS with other systems or creating relational mappings between systems.
12The ISSB Staff believes that SICS was designed to group industries by their shared sustainability characteristics, that relational mappings can help bridge gaps and that certain entities may need to refer to multiple SASB Standards. The ISSB Staff Paper considers trade-offs with switching to another system and notes that switching could substantively impact the ISSB's standard-setting activities and require significant resources for the ISSB and stakeholders that use the current system. The ISSB Meeting Summary, and Paragraph BC14 of the Basis for Conclusions, notes that the ISSB decided to continue to group entities into industries based on shared sustainability-related risks and opportunities that could reasonably be expected to affect an entity's prospects, as represented by SICS, but to consider enhancing the industry groupings when it enhances the SASB Standards. Enhancements could include structural changes, improving international applicability, and supporting entities with complex or diverse activities, for example, by greater consistency across industries. The ISSB could also consider supplemental activities.
13The FRC's 2023 response to the ISSB Exposure Draft Methodology for Enhancing the International Applicability of the SASB Standards and SASB Standards Taxonomy Updates notes that the industry classifications with the SICS are based on US market research conducted by SASB. In its response, the FRC also encouraged the ISSB to consider whether to group industry-specific requirements at the sub-sector level and therefore remove the industry categories and make the SASB Standards more manageable.
Questions for the TAC
- What are the TAC's views on the industry groupings in SICS and the priorities for enhancements to them?
Phased approach
14The ISSB is using a phased approach to enhance the SASB Standards.
15The SASB Exposure Draft sets out proposed amendments to all eight industries in the Extractives sector and one from the Processed Foods industry. This consists of the following nine SASB Standards:
- the Coal Operations SASB Standard;
- the Construction Materials SASB Standard;
- the Iron & Steel SASB Standard;
- the Metals & Mining SASB Standard;
- the Oil & Gas – Exploration & Production SASB Standard;
- the Oil & Gas – Midstream SASB Standard;
- the Oil & Gas – Refining & Marketing SASB Standard;
- the Oil & Gas – Services SASB Standard; and
- the Processed Foods SASB Standard.
16We expect the ISSB to publish an exposure draft later this year setting out proposed amendments to SASB Standards in the remaining three priority industries: Agricultural Products, Meat, Poultry & Dairy, and Electric Utilities & Power Generators.
17The July 2024 ISSB Staff Paper recommends using a phased approach to enhance the SASB Standards, with enhancements in two overlapping phases. Phase 1 would focus on an initial set of priority industries and Phase 2 could focus on a further set of industry standards or on cross-cutting themes (which are yet to be determined). The paper also provides the rationale for the selection of the 12 priority industries, which includes:
- the volume of stakeholder feedback regarding these industries, including from investors;
- the wide range of sustainability-related risks and opportunities in these industries;
- the overlap with issued GRI sector standards and planned EFRAG sector standards;
- the volume of BEES and human capital-related content in these standards.
18For the eight standards in the Extractives sector it has been useful to be able to review them together, since there are many similarities across the types of activities and risks and opportunities within a sector. The release of only one standard (Processed Foods) in the Food & Beverage Sector does not provide this opportunity. As there are two further standards in the Food & Beverage Sector due to be consulted on in the coming months, it may have been useful to have consulted on all three standards together. The ISSB may consider this matter in its approach to prioritisation for further phases in its Enhancing the SASB Standards project. In line with this, we suggest that the ISSB considers finalising the Processed Foods SASB Standard only in conjunction with the other Food & Beverage sector standards, in order to avoid any unintended potential inconsistencies.
Questions for the TAC
- What are the TAC's views on the use of a phased approach to enhance the SASB Standards, including the selection of the 12 priority industries and the priorities for Phase 2?
Targeted amendments
19The SASB Exposure Draft proposes making targeted amendments to 41 other SASB Standards regarding:
- greenhouse gas emissions;
- energy management;
- water management;
- labour practices; and
- workforce health and safety.
20Appendix A of the Basis for Conclusions provides a list of SASB Standards and the metrics in those Standards that would be affected by the proposed targeted amendments. The ISSB maintains that targeted amendments will both improve the comparability of disclosures across industries and provide better support for entities with complex or diverse operations. The table below outlines some potential advantages and disadvantages of this approach. It reflects the TAC Secretariat's preliminary analysis and is intended to serve as an initial basis for discussions with stakeholders, going forward.
| Aspect | Advantages | Disadvantages |
|---|---|---|
| Consistency and comparability | • Aligns metrics across industries, improving comparability for investors and other users of reports. • Supports entities with complex or diverse operations by harmonising disclosures. |
• May obscure industry-specific nuances if metrics are overly generalised. This will also impact conglomerates with multiple business lines. • Could lead to misinterpretation if aligned metrics don't fully reflect industry-specific risks. |
| Timeliness and Responsiveness | • Enables faster updates in response to stakeholder feedback on emerging issues. • Provides timely support for IFRS S1 and IFRS S2 implementation. |
• Risk of premature updates, especially where research (e.g. BEES and human capital) is still ongoing. • Could hinder implementation of IFRS S2, by making premature/unsuitable updates. |
| Compliance burdens and efficiency | • Could more quickly reduce duplication for entities arising from reporting under multiple frameworks due to improved interoperability. • May reduce compliance burdens and costs if targeted amendments minimise/limit the need for future updates to other SASB Standards. |
• As further updates to an unspecified number of SASB standards are expected in the medium to long-term and may also occur in the short-term, following release of 3 further standards by end of 2025, this may create confusion. Entities could struggle to keep track of which version applies in a context where IFRS S1 refers to the SASB Standards as a whole. This confusion could be compounded for entities operating globally as some jurisdictions have fixed their reference to the SASB Standards at a certain date, e.g. Standards issued by the Sustainability Standards Board of Japan have a fixed reference to the SASB Standards as revised in December 2023. • May be seen as less efficient and as generating a greater compliance burden through requiring two or more sets of changes (one from the original targeted amendments, and others from future revisions following a deep-dive review). |
| Certainty/ implementation | • May reduce uncertainty for preparers in the short term. • May facilitate alignment by entities sooner, aiding transition to IFRS Standards. |
• May create uncertainty for preparers (if they think the same standard will change in the future). • May discourage swift alignment as entities expect further changes, and instead wait for finalised SASB Standards, following full reviews, before using them. |
| Comprehensive Review versus Targeted Updates | • Allows for incremental improvements without waiting for lengthy full-scale and in-depth reviews & can address urgent disclosure user issues more quickly. | • A comprehensive review in future might identify deeper or structural issues (e.g. technical protocols, industry-specific metrics), necessitating significant changes. • Risks of missing broader implications if only parts of standards are updated. |
| Stakeholder Trust and Transparency | • Demonstrates responsiveness to investor needs and alignment with other frameworks. • May be viewed as a pragmatic use of limited standard setting resources. |
• Questions may arise about whether the ISSB has conducted sufficient analysis to confirm applicability of metrics/technical protocols across industries. • Perception of rushed or piecemeal updates could affect credibility of the SASB Standards. |
21The SASB Exposure Draft asks:
'Do you agree with the proposal to align corresponding metrics in other SASB Standards beyond the nine priority industries to maintain consistent disclosures on these common topics in industries subject to equivalent disclosure requirements? Do you agree that doing so would improve the comparability of information? Why or why not?
Do you agree that these proposed targeted amendments should be implemented before completing a comprehensive review of each of the SASB Standards affected by these amendments? Do you agree that this approach would support the objective of enhancing the SASB Standards to provide timely support to entities in applying IFRS S1? Why or why not?'
Questions for the TAC
- What are the TAC's views on making targeted amendments?
Climate-related content
22The ISSB is proposing to enhance the climate-related content in the nine priority industries, as well as making targeted amendments to climate-related metrics in other SASB Standards. The ISSB is also proposing to maintain alignment with the IFRS S2 industry-based guidance by making consequential amendments to the guidance.
23The June 2024 ISSB Staff Paper notes that enhancing the climate-related content is important because it is a significant portion of the overall body of SASB Standards, there is significant overlap between the climate-related content and BEES, and enhancing the climate-related content could support the implementation of IFRS S2. The March 2025 ISSB Staff Paper further notes that enhancing the IFRS S2 industry-based guidance could support the implementation of IFRS S2 by enhancing international applicability, improving interoperability with other sustainability-related standards and frameworks and by aligning with IFRS S2 itself. The ISSB is also due to update IFRS S2 by the end of this year for other proposed amendments, so there may be multiple versions of this since it is expected that the amendments to the SASB Standards (and therefore the IFRS S2 industry-based guidance) will not be finalised until 2026.
24The ISSB notes that its proposals could have implications for preparers who are implementing IFRS S2 and considered how it could use the effective date of the final amendments to ensure that they would not negatively affect preparers' implementation of IFRS S1 and IFRS S2.1
25The SASB Exposure Draft asks:
'Do you agree that the ISSB should amend the climate-related content in the SASB Standards for the priority industries and make targeted amendments to the climate-related content in the SASB Standards for other industries, as proposed in this Exposure Draft? Why or why not?'
Questions for the TAC
- What are the TAC's views on making climate-related amendments and, in particular, what are the TAC's views on making consequential amendments to the IFRS S2 industry-based guidance?
Effective date
26The ISSB proposes to set an effective date for the amendments that will occur between 12 and 18 months after their issuance and permits early application. BC162 of the Basis for Conclusions notes that the ISSB will decide the effective date for the amendments after considering the feedback on the proposed amendments. The position for the other three SASB Standards that are due by the end of 2025 has not been expressly confirmed.
27The SASB Exposure Draft asks:
'Do you agree with the proposed approach for setting the effective date of the amendments and permitting early application? Why or why not?'
Questions for the TAC
- What are the TAC views on the effective date?
All questions for the TAC
- What are the TAC's views on the ISSB's status of and its intentions for the SASB Standards, including the due process?
- Does the TAC agree that the above recommendations (in paragraph 8) should be made in the TAC's response letter to the ISSB? And does it have any additional comments or observations about them?
- What are the TAC's views on the industry groupings in SICS and the priorities for enhancements to them?
- What are the TAC's views on the use of a phased approach to enhance the SASB Standards, including the selection of the 12 priority industries and the priorities for Phase 2?
- What are the TAC's views on making targeted amendments?
- What are the TAC's views on making climate-related amendments and, in particular, what are the TAC's views on making consequential amendments to the IFRS S2 industry-based guidance?
- What are the TAC's views on the effective date?
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BC45 of the Basis for Conclusions ↩