| ESRS (under CSRD) | ISSB (IFRS S1 & S2) | |
|---|---|---|
| Issued by | EFRAG, adopted by the European Commission | International Sustainability Standards Board (IFRS Foundation) |
| Legal basis | EU directive (CSRD) — legally mandatory for in-scope companies | Adopted voluntarily or made mandatory at the discretion of each jurisdiction |
| Scope of topics | Broad: environmental, social, and governance, including "double materiality" (impact on the world, and impact on the company) | Investor-focused: sustainability-related risks and opportunities material to enterprise value, with IFRS S2 specifically on climate |
| Materiality approach | Double materiality — both financial materiality and impact materiality | Single (financial) materiality — focused on what affects investor decision-making |
| Digital tagging | ESRS XBRL taxonomy developed, but mandate still pending an ESMA Regulatory Technical Standard as of mid-2026 | Varies by adopting jurisdiction — some require iXBRL tagging aligned with local financial reporting formats, others don't yet |
Where they're designed to interoperate
The IFRS Foundation and EFRAG have worked on an interoperability guide specifically so that a company reporting under both frameworks isn't forced to produce two entirely separate sets of climate disclosures — ESRS E1 (climate change) and IFRS S2 share substantial common ground, particularly on Scope 1, 2, and 3 emissions reporting.
Where they genuinely differ
The most significant structural difference is materiality. ESRS requires "double materiality" — disclosing both how sustainability issues affect the company financially, and how the company's activities affect the world (environment, people). ISSB standards use single (financial) materiality — focused specifically on what's relevant to investors' decisions about providing capital. A company reporting under both may need to disclose some things for ESRS that wouldn't be required under ISSB alone.
Why this matters for tagging strategy
For a company that has to satisfy both frameworks — a common situation for large EU-based multinationals with subsidiaries in ISSB-adopting jurisdictions — the practical approach is usually to build one underlying sustainability dataset that's comprehensive enough to serve both, then tag it differently for each framework's specific taxonomy, rather than running two entirely separate reporting processes. See our multi-framework mapping service for how we approach this.
Frequently Asked Questions
If I report under ISSB, do I automatically satisfy ESRS too?
No — ESRS requires double materiality disclosures that go beyond what ISSB's single-materiality approach covers, so ISSB-aligned reporting alone generally won't fully satisfy ESRS requirements.
Can the same underlying data be tagged for both frameworks?
Largely yes, particularly for climate-related metrics like GHG emissions, where the two frameworks share substantial common ground — though the actual tags and some disclosure requirements differ between taxonomies.
Which framework should a company prioritise if it only has to comply with one?
That depends entirely on which regulator actually requires reporting from your company — this isn't a choice most companies make freely, it follows from where you're incorporated, listed, or doing business.