Abstract As climate-related risks become increasingly material to corporate performance and investor decision-making, the need for consistent, comparable disclosure standards has become urgent. Yet efforts to establish a global baseline have been hindered by regulatory fragmentation and competing frameworks. While the European Union’s (EU) Corporate Sustainability Reporting Directive was expected to trigger a ‘Brussels Effect’ and define the global norm, its scope has since been scaled back in response to political and economic pressures. The USA had similarly retreated from comprehensive disclosure mandates. Against this backdrop, the International Sustainability Standards Board (ISSB) has emerged, somewhat unexpectedly, as the leading platform for global convergence. Created under the authority of the International Financial Reporting Standards Foundation, the body responsible for developing globally recognized accounting standards, the ISSB leveraged its institutional credibility and infrastructure to accelerate uptake. This article argues that the ISSB’s success stems not from regulatory power, but from its institutional design and grounding in private-sector practice. Notably, it builds directly on the Sustainability Accounting Standards Board (SASB), a fully market-driven initiative created by and for private actors to produce financially material, decision-useful disclosures. By integrating the SASB and Task Force on Climate-related Financial Disclosures’ risk framework, the ISSB offers a model that is both credible and pragmatic, one already familiar to global capital markets. This article shows how the ISSB has transformed private standard-setting into a viable global baseline for climate disclosure.
Gadinis et al. (Fri,) studied this question.