A Comparison Sustainability Disclosure Regulations

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A comparison of Global Sustainability Reporting Standards: ISSB, CSRD, SEC, and ASRS

As sustainability reporting becomes a fundamental part of corporate transparency, various regulatory bodies worldwide have introduced frameworks to standardize disclosures. Understanding the differences between these frameworks is essential for businesses operating across multiple jurisdictions.

This article compares four key sustainability reporting standards:

1. International Sustainability Standards Board (ISSB);
2. Corporate Sustainability Reporting Directive (CSRD) in the EU;
3. U.S. Securities and Exchange Commission (SEC) Climate Disclosure Rules;
4. Australian Sustainability Reporting Standards (ASRS).

We compare the different supporting standards on the following bases:

1. Scope and Applicability – Defines who must comply with the standards, whether it’s global, regional, or sector-specific. Businesses need to know if a regulation applies to them.
2. Materiality Approach – Determines whether the reporting focuses only on financial impacts (single materiality) or includes wider societal and environmental impacts (double materiality). This distinction affects the depth and breadth of disclosures required.
3. Reporting Requirements – Outlines what must be reported, such as governance, risk management, and ESG (Environmental, Social, and Governance) metrics. This ensures businesses meet investor and regulatory expectations.
4. Greenhouse Gas Emissions Reporting – Specifies whether companies must disclose Scope 1, 2, and 3 emissions, which are critical for assessing their climate impact and aligning with carbon reduction targets.
5. Assurance Requirements – Indicates whether third-party verification or audits of sustainability reports are required. This helps ensure credibility, accuracy, and investor confidence.
6. Implementation Timeline – Shows when businesses need to start complying with the standards. Understanding deadlines helps with preparation, data collection, and strategic planning.
7. Alignment with International Agreements – Highlights how the reporting standards align with global climate commitments, such as the Paris Agreement. This is key for companies setting sustainability goals and demonstrating long-term environmental responsibility.


CriteriaISSBCSRDSECASRS
1. Scope and Applicability
ScopeGlobal baseline for sustainability disclosuresMandatory for large companies & listed SMEsClimate-related disclosure for publicly traded companiesSustainability reporting standard for Australian entities
JurisdictionWorldwideEuropean UnionUnited StatesAustralia
Key FocusHarmonization of reporting for investors and stakeholdersComprehensive ESG reporting, supporting EU sustainability goalsConsistent data on climate risks for investorsFocuses on sustainability disclosures relevant to Australian regulations and business environment
2. Materiality Approach
Materiality PerspectiveSingle materialityDouble materialityFinancial materialityDouble materiality (considering both financial and sustainability impacts)
Key ConsiderationsFocuses on financial impacts of sustainability issues on the companyConsiders financial impacts and the company’s impact on society and environmentSimilar to ISSB, focusing on investor-relevant informationAligns with Australian regulatory and investor expectations, considering both financial and environmental/social impacts
3. Reporting Requirements
Governance & StrategyRequiredRequiredRequiredRequired
Risk ManagementRequiredRequiredRequiredRequired
Metrics & TargetsRequired for significant sustainability risksDetailed ESG topics, including transition plans to a sustainable economyFocused on climate-related risks and GHG emissions disclosureAligns with Australian sustainability priorities and regulatory frameworks
4. Greenhouse Gas Emissions Reporting
Scope 1 & 2 Required?YesYesYesYes
Scope 3 Required?If materialYesOnly if material or part of the company’s GHG targetYes, where material or mandated by Australian sustainability reporting requirements
5. Assurance Requirements
Assurance RequirementEncouraged but not mandatoryLimited assurance requiredMandates attestation for Scope 1 & 2 emissionsLimited assurance required initially, with potential future requirements for reasonable assurance
Additional NotesVoluntary for improved credibilityMoving towards reasonable assurance over timeApplies to large accelerated filersExpected to evolve in line with Australian financial and sustainability regulations
6. Implementation Timeline
Effective DateJanuary 1, 2024January 1, 2024March 6, 2024Expected phased implementation starting from 2024/2025 financial year
Implementation StagesSingle effective date for all entitiesPhased based on company size and typeCompliance dates staggered by filer statusPhased approach based on company size and industry sector
7. Alignment with International Agreements
Paris Agreement Alignment?Required disclosure on climate-related targetsMandatory disclosure of alignmentNot explicitly requiredExpected alignment with Australian climate commitments, including the Paris Agreement
Additional RequirementsCompanies must disclose comparability with international commitmentsCompanies must outline plans for climate neutrality by 2050Focuses on material climate-related risks and opportunitiesAustralian entities expected to disclose how their sustainability targets align with national and international commitments

Conclusion

Navigating sustainability reporting standards can be particularly complex for Australian businesses, given the interplay between domestic regulations and international expectations. The ISSB, CSRD, SEC, and ASRS frameworks all aim to enhance transparency and investor confidence, but they differ in their scope, materiality principles, and compliance requirements. While European businesses must meet the CSRD’s extensive ESG disclosure mandates, and U.S. companies focus on financial materiality under SEC rules, Australian firms will need to align with ASRS.

For Australian businesses, ASRS will play a crucial role in aligning sustainability reporting with international best practices while addressing local regulatory expectations. Meanwhile, the ISSB serves as a global baseline, promoting consistent and comparable sustainability disclosures across jurisdictions.

As sustainability compliance requirements evolve, Australian companies must proactively prepare for mandatory sustainability reporting, carbon reduction targets, and assurance obligations. By integrating sustainability into their core business strategy, organizations can enhance resilience, investor confidence, and regulatory compliance while positioning themselves as leaders in the transition to a low-carbon economy.


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