IFRS: Disclosing information about anticipated financial effects applying ISSB standards

IFRS: Disclosing information about anticipated financial effects applying ISSB standards

• 26 September 2025
• Sustainability Reporting
• South African Accounting Academy

Summary:

The International Sustainability Standards Board (ISSB) (under the IFRS Sustainability flag) has issued new educational material that discusses the disclosures of anticipated financial effects of sustainability-related risks and opportunities required by ISSB Standards.
Article:

This document focuses on disclosures of information about anticipated financial effects of climate-related risks and opportunities, in the light of stakeholders’ feedback that educational material on how to apply the relevant requirements in ISSB Standards would support companies applying these requirements. The interoperability with the corresponding disclosure requirements in the European Sustainability Reporting Standards (ESRS) is also briefly discussed.
Although this document focuses on climate-related risks and opportunities, the requirements for the disclosure of information about the anticipated financial effects of sustainability-related risks and opportunities in ISSB Standards are identical.

The requirements to disclose information about anticipated financial effects of climate-related risks and opportunities are set out in the context of disclosing information that enables investors to understand a company’s strategy for managing sustainability-related risks and opportunities. ISSB Standards require a company to disclose the effects of sustainability-related risks and opportunities on
its:

• business model and value chain;
• strategy and decision-making; and
• financial position, financial performance and cash flows—that is, the financial effects.

Information about anticipated financial effects provides a complementary perspective about how the financial statements are
expected to be affected over the short, medium and long term. These key disclosure requirements are set out here in 3 sections:

1. Overview of the requirements in ISSB Standards on disclosures about current and anticipated financial effects of
   sustainabilityrelated risks and opportunities and the rationale for those requirements
2. Mechanisms in ISSB Standards that help companies to prepare disclosures about anticipated financial effects

3. Illustrations of disclosure of information about anticipated financial effects applying ISSB Standard

Click here to download the 23-page document:
https://www.ifrs.org/content/dam/ifrs/supporting-implementation/issb-standards/disclosing-information-anticipated-financial-
effects.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• As an auditor and independent reviewer, you need to comply with International Standards on Sustainability Assurance as well as the Sustainability standards that affect the accounting of sustainability issues, as this affects compliance with the relevant standards.
• Compilers of financial statements should be aware of proposed changes to existing sustainability standards issued by the standard-setting bodies, e.g. the ISSB, SASB, etc.
• As an auditor and independent reviewer, you should be aware of proposed changes to existing sustainability standards issued by the standard-setting bodies, e.g. the ISSB, IFRS, etc.
• Your clients, who are preparers of financial statements should be aware of the latest guidance issued by regulators, e.g. IFRS Foundation, ISSB, etc.

Relevance to Your clients:

• Entities that apply the Sustainability standards that affect the accounting of sustainability issues, must be aware of proposed changes to existing sustainability standards and the latest amendments in order to comply with the relevant standards.
• Compilers of annual financial statements must have knowledge of the latest guidance issued by the standard-setting bodies, e.g. the ISSB, SASB, etc.

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