The purpose of the ISSB is to empower capital market participants with the

right information to support better economic and investment decision-making

The ISSB issued its inaugural IFRS Sustainability Disclosure Standards—IFRS S1

General Requirements for Disclosure of Sustainability-related Financial
Information and IFRS S2 Climate-related Disclosures—in June 2023.

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial

Information provides a set of disclosure requirements designed to enable
companies to communicate to investors about the sustainability-related risks
and opportunities they face over the short, medium and long term

IFRS S2 Climate-related Disclosures sets out specific climate-related disclosure

requirements for a company to disclose information about its climate-related
risks and opportunities

IFRS Standards (both Accounting and Sustainability Disclosure Standards) are

designed to meet the needs of existing and potential investors, lenders and
other creditors.

ISSB Standards enable companies to deliver high-quality and decision-useful

information—that can be assured—to investors.
Region/Country Involvement Description
European The EU aligns ISSB standards with its
Integrated with
Union Corporate Sustainability Reporting
CSRD
(EU) Directive (CSRD).
United Planned regulatory alignment Mandatory disclosure
Kingdom for large firms
starting in 2024,
focused on
climate-related
 risks.
Voluntary Allows companies to adopt IFRS S1 and S2 voluntarily
Japan
adoption as a step toward full alignment.
Transition plan for large firms, with initial
Phased mandatory
Canada delay in certain emissions
implementation
disclosures.
Support for ISSB, Australian regulatory bodies are planning
Australia phased phased adoption and promoting
approach alignment with ISSB.
Encourages large firms to adopt ISSB
Voluntary reporting with
Singapore standards, gradually moving toward
regulatory support
mandatory disclosures.
Brazil’s securities regulator mandates ISSB-
Mandatory for public
Brazil aligned disclosures for listed companies
companies by 2026
from 2026.
Plans to align reporting for financial
Considering alignment,
sector firms to ensure
South Africa focusing on
transparency and investor
financial sector
protection.
Draft national standards Developing “China Sustainability Disclosure
China in alignment with Standards,” tailored to national
ISSB environmental policies.
While not adopting ISSB, U.S. SEC climate rules
United Selective
are similar in scope and allow for ISSB
States alignment
consistency.

The EU aligns ISSB standards with its Corporate Sustainability Reporting

Directive (CSRD).
Planned regulatory alignment
Here’s a quick breakdown of **IFRS S1** and **IFRS S2** standards from the
ISSB:

### **IFRS S1 – General Requirements for Disclosure of Sustainability-related

Financial Information**

1. **Purpose**: Establishes requirements for companies to disclose material

sustainability-related risks and opportunities.
2. **Holistic Coverage**: Covers all relevant sustainability aspects, including
environmental, social, and governance (ESG) issues.
3. **Materiality**: Requires disclosures on sustainability issues that are
financially material to the organization.
4. **Flexibility**: Aligns with other existing sustainability frameworks, offering
companies flexibility to incorporate them.
5. **Objective**: Aims to provide a full view of how sustainability risks and
opportunities impact a company’s business model, cash flows, and overall
financial position.

### **IFRS S2 – Climate-related Disclosures**

1. **Focus on Climate**: Specifically addresses climate-related disclosures,

building on the TCFD (Task Force on Climate-related Financial Disclosures)
framework.
2. **Climate Risks and Opportunities**: Requires information on how climate-
related risks and opportunities are identified, managed, and integrated into
business strategy.
3. **Detailed Metrics**: Includes mandatory metrics, such as greenhouse gas
emissions (Scopes 1, 2, and 3).
4. **Resilience Assessment**: Requires companies to disclose their resilience
to climate change, including scenario analysis to assess potential impacts.
5. **Investor-Centric**: Designed to inform investors on how climate change
may affect a company's future cash flows and long-term financial health.

These standards are designed to work together: IFRS S1 provides a broad

framework for sustainability disclosures, while IFRS S2 zeroes in on climate-
specific issues.
Mandatory disclosure for large firms starting in 2024, focused on climate-
related risks.

Shell has focused on sustainability by implementing a range of standards and

activities designed to balance its business operations with environmental and
social responsibilities. Here’s a detailed look at Shell’s sustainability efforts
across key areas:

1. Carbon Emissions Reduction

Net-Zero Emission Targets: Shell aims to become a net-zero energy company by
2050. This includes reducing greenhouse gas (GHG) emissions from both its
own operations and the use of its products by customers.
Carbon Capture and Storage (CCS): Shell invests in CCS technologies to capture
CO₂ emissions from industrial sources and store them underground, thus
preventing them from entering the atmosphere.
Transitioning to Renewable Energy: Shell has made investments in solar, wind,
and hydrogen energy. These initiatives aim to diversify its energy mix and
decrease reliance on fossil fuels.
2. Renewable Energy and Low-Carbon Technologies
Electric Vehicle (EV) Charging Infrastructure: Shell has been developing EV
charging networks worldwide, aiming to make EVs more accessible and reduce
the carbon footprint of road transport.
Biofuels: Shell is investing in advanced biofuels made from waste and
sustainable materials, providing lower-carbon options for transport.
Hydrogen Fuel Initiatives: Hydrogen is a key focus, especially for heavy
industries and transport, as Shell works on producing low-carbon hydrogen.
3. Responsible Sourcing and Supply Chain Management
Sustainable Sourcing of Materials: Shell follows strict guidelines for sourcing
materials, focusing on minimizing environmental impacts and ensuring ethical
labor practices.
Transparency and Accountability: Shell monitors and reports its supply chain
emissions, requiring suppliers to adhere to similar sustainability and emissions
standards.
4. Community and Social Responsibility
Investing in Local Communities: Shell works to support communities where it
operates through programs in education, training, and community health.
Human Rights Standards: Shell adheres to human rights principles across all
areas, addressing social issues, such as labor rights and local community
engagement.
Job Creation and Skills Development: Shell invests in local workforce
development, particularly in developing regions, helping to boost economic
resilience.
5. Environmental Protection and Biodiversity Conservation
Minimizing Environmental Impact: Shell applies best practices for
environmental protection, including wastewater treatment, emissions
monitoring, and spill prevention.
Biodiversity Conservation Programs: Shell funds projects that protect
biodiversity near its operational sites and contribute to ecosystem health.
Sustainable Water Management: Shell has taken steps to improve water use
efficiency, especially in water-scarce regions, and to minimize water pollution
risks.
6. Innovation and Research
Research in Energy Innovation: Shell funds research and development in energy
technologies, including renewables and low-emission solutions.
Collaborations with Universities and Institutions: Shell collaborates with
academic institutions and startups to accelerate sustainable technology
development.
Digital Solutions for Efficiency: Shell employs data-driven technology to
monitor and optimize energy use and emissions reduction across operations.
7. Transparency and Reporting
Sustainability Reporting: Shell publishes annual sustainability reports detailing
its progress on emissions, environmental impact, community engagement, and
other key metrics.
Transparency in Climate Policy Advocacy: Shell provides information on its
lobbying and advocacy efforts related to climate policy, showing alignment with
its sustainability goals.
8. Supporting a Circular Economy
Reducing Plastic Waste: Shell is involved in recycling initiatives and circular
economy projects to reduce plastic waste and find alternative uses for
petroleum products.
Investing in Waste-to-Energy Initiatives: Shell explores waste-to-energy
solutions, which convert waste materials into usable forms of energy, thus
reducing landfill waste and generating clean energy.
9. Employee Engagement in Sustainability
Sustainability Training Programs: Shell provides training and resources to its
employees to enhance their understanding of sustainable practices.
Green Employee Programs: Shell has initiatives that encourage employees to
reduce their carbon footprint, such as commuting incentives and green office
practices.
Shell’s sustainability standards and initiatives demonstrate its commitment to
balancing business growth with environmental stewardship and social
responsibility. However, as with all large energy companies, Shell’s progress in
sustainability is closely watched by environmental groups and regulatory
bodies, which often urge for faster and deeper transitions away
from fossil fuels.

Over 20 countries, covering 55% of global GDP, have committed to

implementing or aligning with ISSB standards.
Regions leading adoption include the European Union, United Kingdom, Japan,
Canada, Brazil, Australia, and China.
IOSCO Endorsement: Supports adoption in 130 jurisdictions, representing 95%
of global financial markets.
India has not officially committed to implementing ISSB standards.
Indian regulators, such as SEBI (Securities and Exchange Board of India),
already mandate Business Responsibility and Sustainability Reporting (BRSR)
for top 1,000 listed companies.

Balancing global alignment with localized requirements.

Preparing companies for comprehensive climate-related disclosures.

Aligning with ISSB could attract global investment.

Strengthen India's position as a leader in sustainable business practices.