Costa Rica’s ISSB Runway: Use 2026–2027 to Build, Not to Wait

Most companies treat sustainability disclosure as a future problem—something to address when regulators force the issue. But Costa Rica's adoption of IFRS S1 and S2 has compressed that timeline significantly. The ISSB Standards may be applied voluntarily for fiscal years beginning on or after January 1, 2024, but mandatory application begins for fiscal years starting on or after January 1, 2027, with first required reports published in 2028. For publicly accountable entities regulated by CONASSIF and large taxpayers, this means the window to prepare is narrower than it appears. The question is no longer whether to disclose climate and sustainability information at a financial reporting standard—it's whether your organization will be ready when disclosure becomes a competitive differentiator.

The mandatory scope is clearly defined: publicly accountable entities regulated and supervised by CONASSIF, plus entities designated as "large taxpayers" by the tax authority. Entities outside these categories that already apply IFRS Accounting Standards may adopt the ISSB Standards when management determines it appropriate. Entities applying IFRS for SMEs are not required to adopt them, and certain governmental entities are excluded.

The Strategic Window

This timeline creates a practical reality: 2026 is the final year before disclosures become a market signal across Costa Rica's regulated sector. This is the year to transition from sustainability reporting as communication to sustainability disclosure as finance-grade information.

Finance-grade disclosure means the sustainability narrative connects to enterprise value through cash flows, access to financing, and cost of capital. It requires that boards and audit committees understand what is disclosed, why it is material, and how it is controlled. Climate transitions from a standalone narrative to an integrated risk-and-strategy lens that links scenario analysis to capital allocation, product design, and resilience investments.

Three Actions to Prioritize Now

1. Governance and ownership: Assign executive accountability, define board oversight, and document how materiality judgments are developed, challenged, and approved.
2. Data discipline: Build an "ISSB data spine" for Scopes 1 and 2 emissions, energy consumption, and the operational metrics that support your transition plan. Prioritize traceability over volume.
3. Integration: Align timelines, controls, and documentation with financial reporting processes to ensure sustainability disclosures can be produced reliably each reporting cycle.

What to Expect

Costa Rica's regulatory framework remains in development as financial regulators finalize implementation rules. The CCPA's implementation schedule was amended in January 2025. The current approach does not propose jurisdictional modifications to IFRS S1/S2 and does not extend transition reliefs beyond what the ISSB provides. Assurance is not currently required, but expectations will increase once early adopters begin publishing.

The Payoff

The benefit extends beyond compliance. Organizations that execute this well will communicate in the language investors use, defend strategy effectively, attract capital more readily, and manage climate and sustainability risks with the same rigor applied to any material financial topic.

If we can be helpful as you consider how these insights will affect your business, please don’t hesitate to reach out to our team.

David Araya, Analyst, Third Economy

david.araya@thirdeconomy.com

Jose Alfaro, Advisor, Third Economy

jose.alfaro@thirdeconomy.com

Disclaimer: The information provided does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available are for general informational purposes only.