This study aims to examine the influence of the International Sustainability Standards Board (ISSB) on the discourse surrounding sustainability reporting in Europe, specifically focusing on its impact on the discourse of the European Financial Reporting Advisory Group (EFRAG).
This research relies on the analysis of 586 documents and 257 h of recordings from ISSB and EFRAG meetings. The data are categorised into two periods: before and after the ISSB launched its global sustainability reporting standards, IFRS S1 and IFRS S2. A thematic analysis is conducted to identify discourse shifts, with Hardy’s (1994) power framework used to interpret the ISSB’s growing influence.
This research reveals significant changes in the discourse on materiality following the launch of IFRS S1 and S2. While EFRAG previously emphasised a double-materiality approach, the focus shifts post-launch toward interoperability with ISSB standards. The ISSB’s investor-focused, single materiality approach appears to be gaining dominance, potentially narrowing the scope of EFRAG’s reporting agenda.
This study uses documentary analysis, which has some limitations. Further research could add to the findings through the use of alternative qualitative methods such as interviews with standard-setters.
The findings highlight the need for practitioners and policymakers to carefully consider the implications of aligning sustainability reporting standards. Collaboration efforts may disproportionately favour large, investor-focused frameworks, risking the neglect of broader environmental and social impacts. The findings are particularly timely and pressing given the recent reduction in sustainability reporting requirements outlined in the EC’s 2025 Omnibus legislation.
By showcasing the ISSB’s influence, this study underscores the importance of maintaining a balanced approach to sustainability reporting that addresses both financial and societal dimensions. A dominant single materiality focus may limit the effectiveness of reporting in addressing global sustainability challenges.
This study contributes to the emerging literature on socio-political dynamics in sustainability standard-setting. It applies Hardy’s (1994) power framework to demonstrate how instrumental, symbolic and systemic powers enable the ISSB to shape sustainability discourse.
