IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information IFRS S2 Climate-related Disclosures
Launched by the ISSB under the IFRS Foundation, IFRS S1 "General Requirements" and IFRS S2 "Climate-related Disclosures" establish a global baseline for sustainability-related financial disclosures, effective for periods beginning 1 January 2024. Built on the TCFD architecture (Governance, Strategy, Risk Management, Metrics & Targets) and interoperable with SASB-industry metrics, the GHG Protocol and increasingly aligned with GRI/ESRS, S1 & S2 aim to deliver consistent, comparable, insightful information to investors. The standards are designed to be reported alongside financial statements and to improve capital-market trust by reducing greenwashing and disclosure gaps.
Put simply: to give investors high-quality, comparable insight into how sustainability matters affect enterprise value.
IFRS S1 sets the foundational requirements: disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect cash flows, access to finance, or cost of capital over the short, medium, or long term. It connects the dots between sustainability information and the financials, and points to SASB when industry-specific metrics are needed.
IFRS S2 focuses on climate: require disclosures on physical and transition risks, strategy and resilience (including transition plans and scenario analysis), and metrics & targets.
Together, S1 & S2 create a single language that enterprises can use across markets, reducing duplication and enabling investors to compare companies on a like-for-like basis.
Disclosure of the four main pillars Governance: Who oversees sustainability and climate; processes, controls, and accountability.
Strategy: How risks/opportunities influence business model and strategy; resilience (incl. scenario analysis) and transition plans; time horizons
Current and anticipated financial effects of sustainability-related risks and opportunities.Risk Management: How risks/opportunities are identified, assessed, prioritized, and monitored, including integration with the enterprise risk framework.
Metrics & Targets: Performance against company, industry, and cross-industry metrics; Scope 1, 2 and Scope 3; targets set voluntarily or by law/regulation, with progress and methodology.
Apply a financial-materiality lens and disclose what is material to investors (i.e., could reasonably affect cash flows, cost of capital, or access to finance).
Publish sustainability information at the same time as financial statements. Establish data controls, evidence packs, and audit trails to support assurance.
“S1 & S2 are a market-grade disclosure baseline. Meeting them is both a compliance task and a strategy exercise—showing how sustainability factors shape performance, resilience, and all-term value.“
Gap assessment: Compare current reporting to S1 & S2 requirements; identify missing data and controls. Roadmap: Define roles, milestones, and resourcing; set a realistic phased approach. Data quality: Build processes for collection, validation, consolidation, and scenario analysis inputs. Investor engagement & education: Align disclosures with investor information needs; upskill teams across finance, risk, sustainability, and IT.
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