A new study by PwC, alongside the Institute of International Finance, has explored how effectively financial institutions are adopting sustainability disclosure standards issued by the International Sustainability Standards Board (ISSB).
In conducting the study, PwC surveyed 24 member institutions managing more than $18 trillion in assets, which are already disclosing using the IFRS Sustainability Disclosure Standards.
‘Executives are well versed in the financial reporting needed to meet local capital market requirements, but the rise of sustainability disclosure regulations is pushing them into less familiar territory,’ PwC noted. ‘These requirements have the potential to significantly expand disclosure of non-financial information, testing a company’s ability to source, collect, and analyse data that may sit outside traditional reporting systems and processes.’
Multiple frameworks
As the study found, financial institutions are integrating ISSB standards in reporting environments that already include other frameworks, including the the Task Force on Climate related Financial Disclosures (TCFD), while many also employ Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards.
Respondents are also finding value from ISSB adoption beyond meeting regulatory requirements, with many of the 22 financial institutions that have adopted – or are considering adopting – IFRS S1 citing stronger strategic alignment.
Others cited the ability to connect sustainability performance to financial value creation, stronger integration of sustainability into decision-making, greater transparency, and improved comparability of disclosures.
Compliance challenges
As the study also found, many respondents also noted compliance challenges, with the reporting of anticipated financial impacts cited as a primary concern.
‘Estimating anticipated financial effects requires forward-looking assumptions over time horizons that are typically longer than those used for other financial forecasting and planning purposes,’ the report noted. ‘They require management and those charged with governance of reporting to gain comfort around these significant judgments. […] The survey findings suggest that preparers still struggle with translating sustainability and climate risks into financial outcomes that are comparable and explainable.’
Another challenge cited by respondents relates to data limitations, which affect the accuracy, consistency, and traceability of information being reported under ISSB. Many respondents pointed to ‘immature’ internal systems, controls and processes as key constraints when sourcing, collecting and analysing information.
In this context, more than half of the respondents that have adopted or are considering ISSB cite a lack of standardised definitions and methodologies as among their top three issues.
‘Execution rather than intent’
As PwC’s study suggests, progress on ISSB adoption is happening, but it is ‘execution rather than intent that increasingly sets financial institutions apart’.
Given that ISSB is increasingly being mandated by lawmakers and regulators, PwC suggests that financial institutions should focus on ‘building the foundations that allow disclosures to be produced consistently and with confidence, even as requirements continue to evolve.
‘In the near term, that means accepting a multi-framework reality while strengthening alignment, governance, and data consistency. But in a reporting landscape that remains complex and fast-moving, those that focus now on strengthening the foundations of thoughtful materiality frameworks, data collection and validation, and aligning people’s competencies and technology investments with execution will be better positioned over the long-term to meet any future expectations and to extract lasting value from the reporting effort itself.’
PwC’s survey was undertaken in November and December 2025, among 24 financial institutions that have implemented or are considering implementing IFRS S1 (22 out of 24 institutions) and IFRS S2 (23 of 24). Read more here.
