What the standards are
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures were issued by the ISSB in June 2023. IFRS S1 is effective for annual reporting periods beginning on or after 1 January 2024, and earlier application is permitted only if IFRS S2 is applied at the same time.
What they ask for
- Sustainability-related risks and opportunities that could affect cash flows, financing or cost of capital
- Governance, strategy, risk management, and metrics and targets
- For climate: physical and transition risks, and greenhouse gas emissions
- Information for the same entity and period as the financial statements
Why finance should lead
The disclosures connect directly to the financial statements: assumptions about climate risk must be consistent with impairment tests, useful lives and provisions. Finance teams already run the controls, data and timetables these reports need.
Where it applies
Each jurisdiction decides whether and how to adopt the standards, so requirements differ between markets such as the UAE, Canada and Germany. Check your local regulator and your lenders' expectations before planning your first report.
This article is general information, not accounting, tax or legal advice. Rates, thresholds and effective dates should be confirmed with the official sources (IFRS Foundation, tax authorities, regulators) or your adviser before acting.