Non‑EU climate and ESG reporting regimes (ISSB, UK, US, Singapore, Australia and others)

Global Climate Disclosure Standards & Regulation

The global climate and ESG (Environmental, Social, and Governance) reporting landscape outside the European Union continues to evolve at a remarkable pace, driven by a growing consensus around the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2 standards. This momentum reflects a shared recognition among key jurisdictions—including the UK, Singapore, Australia, and parts of the US—that harmonized, rigorous, and auditable sustainability disclosures are essential to unlocking capital market efficiencies, managing systemic climate risks, and meeting stakeholder expectations.

Global Convergence Around ISSB Standards: A Multipolar Regulatory Framework

Since the ISSB finalized IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures), multiple non-EU jurisdictions have moved decisively to embed these standards into their regulatory frameworks. This trend marks a shift from fragmented voluntary reporting towards mandatory, standardized ESG disclosures that offer comparability and reliability on a global scale.

United Kingdom: The UK’s Financial Conduct Authority (FCA) has fully integrated ISSB standards into its listing rules and financial reporting frameworks, effectively elevating sustainability disclosures to the same level of importance as traditional financial statements. This integration is expected to come into force in phases starting 2024, making the UK one of the earliest adopters of ISSB rules outside the EU. The FCA has emphasized that sustainability data will be subject to the same enforcement and audit rigor, signaling a transformative step in ESG governance.

“The FCA Just Made Sustainability Data a Financial Reporting Item, marking a fundamental shift in regulatory expectations for listed companies.”
(Source: FCA announcements)
Singapore: The Monetary Authority of Singapore (MAS) has mandated climate-related disclosures aligned with ISSB IFRS S2, positioning Singapore as a regional ESG reporting hub. The nation continues to balance ISSB climate standards with broader ESG frameworks such as the Global Reporting Initiative (GRI), thereby addressing both climate-specific and wider sustainability impacts. Singapore’s phased compliance deadlines and enforcement guidelines underscore its commitment to providing clear and actionable climate data for investors.

“Singapore Adopts ISSB Standards: Mandatory Climate Reporting for Financial Institutions and Listed Companies.”
(Source: MAS regulatory updates)
Australia: Australia’s adoption of ISSB standards is advancing through a carefully managed regulatory transition, with ASIC and the Australian Accounting Standards Board (AASB) coordinating efforts to harmonize local frameworks with IFRS S1 and S2. Enforcement mechanisms are being strengthened, with a focus on assurance quality and audit readiness. Recent consultations have highlighted a push for mandatory third-party verification to enhance trust in reported data.

“Australia's ISSB Adoption: ESG Standards in a Multipolar World” outlines the balancing act between global consistency and domestic market needs.
(Source: AASB consultation papers)

United States: Fragmentation Amid Growing Regulatory Assertiveness

While the US does not yet have a unified federal ESG reporting mandate, the regulatory landscape is intensifying:

The Securities and Exchange Commission (SEC) continues to develop its climate disclosure rules, focusing on detailed reporting of Scope 1, 2, and, notably, Scope 3 emissions, as well as governance and risk management related to climate. The SEC’s proposals are at an advanced stage but face political opposition and industry lobbying, delaying finalization. However, the SEC has reaffirmed its commitment to transparency and investor protection in ESG matters.

“The SEC’s climate disclosure framework aims to align with global standards, including ISSB, though implementation challenges remain.”
(Source: SEC rulemaking updates)
At the state level, California’s Air Resources Board (CARB) has pioneered robust climate disclosure regulations that require comprehensive corporate reporting, including full Scope 3 emissions, with enforceable penalties and mandatory third-party verification. CARB’s rules set a high bar for subnational climate governance and have influenced similar initiatives in other US states.

“California air board OKs first rules for corporate climate disclosures, requiring detailed emissions data and verification.”
(Sources: CARB official releases)
The adoption of double materiality concepts—evaluating not only how sustainability issues affect companies financially but also how companies impact the environment and society—is gaining traction in the US, particularly among large asset managers and forward-looking regulators. This represents a significant shift in ESG governance, aligning the US with evolving global best practices.
(Source: “USA and Double Materiality - CSE”)

Rising Assurance Demands and Evolving Audit Standards

A critical global development is the growing insistence on mandatory third-party assurance of ESG disclosures to enhance data credibility and investor confidence:

The AICPA Auditing Standards Board (ASB) in the US has proposed comprehensive updates to attestation standards, extending assurance engagements to cover not only traditional ESG metrics but also emerging areas such as AI-generated sustainability data, biodiversity impacts, and full lifecycle emissions accounting. These standards aim to bring audit-level rigor to ESG information, paralleling financial audits.

“Auditing Standards Board proposes changes to attestation standards to cover the expanding scope of ESG assurance.”
(Source: AICPA proposals)
The UK and Australia are similarly advancing assurance requirements tied to ISSB-aligned disclosures, encouraging companies to implement robust internal controls and audit-ready ESG data systems. Firms are expected to demonstrate traceability, accuracy, and timely disclosures, raising the bar for compliance and risk management.

Corporate Responses: Integrating Technology, Governance, and Supply Chain Engagement

Facing these evolving regulatory demands, companies are adopting a range of strategic responses to ensure compliance and capitalize on ESG opportunities:

Integrated Carbon and ESG Accounting: Leading firms are deploying advanced digital platforms—such as Persefoni and Watershed—that leverage AI and big data to capture, validate, and report comprehensive emissions data, including complex Scope 3 categories. These platforms facilitate real-time monitoring and scenario analysis, enabling proactive risk management.
Governance Enhancements: Companies are adopting SOX-style internal controls for ESG data, including segregation of duties, continuous audit trails, and real-time monitoring dashboards. These measures mitigate risks of data manipulation, enhance accountability, and prepare organizations for intensified regulatory scrutiny.
Supply Chain Engagement: In response to extended disclosure requirements, firms are revising procurement contracts to mandate emissions data from suppliers, investing in capacity-building programs for small and medium-sized enterprises (SMEs), and collaborating with industry groups to improve upstream decarbonization efforts.
Cybersecurity Focus: The digitization of sustainability data has elevated cyber risks. Organizations are strengthening cybersecurity protocols to protect ESG data integrity against manipulation, breaches, or ransomware attacks, recognizing that compromised data can have severe financial and reputational consequences.

Cross-Border Compliance Challenges and Regulatory Interplay

Multinational corporations face the complex task of navigating overlapping and sometimes divergent regulatory frameworks:

They must reconcile the EU’s ESRS/CSRD directives, which emphasize double materiality and comprehensive sustainability disclosures, with ISSB-aligned regimes that focus initially on climate-related financial disclosures, as seen in the UK, Singapore, and Australia.
In the US, federal SEC proposals and state-level initiatives like California’s CARB rules introduce additional layers of regulatory expectations, creating a patchwork that demands sophisticated compliance strategies.
Despite these challenges, the global trend is moving toward regulatory convergence, underpinned by ISSB standards, which helps reduce reporting burdens, improve comparability, and facilitate cross-border capital flows.

Strategic Outlook for Companies

To thrive amid this dynamic environment, companies should:

Embed ISSB-aligned frameworks as the core of their ESG disclosure strategy, anticipating mandatory adoption timelines in major markets.
Invest in audit-ready ESG data infrastructure capable of handling full-scope emissions accounting, lifecycle analyses, and assurance requirements.
Strengthen governance and assurance mechanisms to manage emerging regulatory risks and meet rising enforcement expectations.
Engage supply chains proactively to ensure upstream data quality and drive decarbonization across value chains.
Leverage advanced technologies such as AI-driven analytics, blockchain for traceability, and secure data platforms to enhance transparency and compliance agility.
Monitor regulatory developments closely, particularly in the US and Asia-Pacific, to anticipate changes and maintain competitive advantage.

Conclusion

The non-EU climate and ESG reporting landscape is rapidly coalescing around ISSB standards, with jurisdictions like the UK, Singapore, Australia, and California leading the way in raising disclosure, assurance, and governance requirements. While the US federal framework remains in flux, state-level initiatives signal a robust regulatory appetite for transparency and accountability.

For companies operating globally, mastering the interplay of these evolving regimes is both a challenge and an opportunity. Those that proactively align with emerging standards, invest in high-quality data systems, and embed rigorous governance will not only comply with regulatory mandates but also enhance their market credibility, attract sustainable investment, and build resilience in the transition to a low-carbon economy.

Selected Further Reading

“The FCA Just Made Sustainability Data a Financial Reporting Item” — UK’s endorsement of ISSB standards and its implications.
“Singapore Adopts ISSB Standards: Mandatory Climate Reporting for Financial Institutions” — MAS’s regulatory approach.
“Australia's ISSB Adoption: ESG Standards in a Multipolar World” — Insights on Australia’s phased implementation.
“California air board OKs first rules for corporate climate disclosures” — Details on CARB’s pioneering regulations.
“Auditing Standards Board proposes changes to attestation standards” — Proposed US audit standard revisions for ESG.
“USA and Double Materiality - CSE” — Analysis of double materiality adoption in US ESG governance.
“Checklist for ESG Compliance in Due Diligence” — Practical guidance for navigating evolving global ESG regimes.