Council Fire
Regulations

ISSB: IFRS Sustainability Disclosure Standards (S1 & S2)

Guide to the ISSB's IFRS S1 and S2 sustainability disclosure standards — requirements, adoption status, and how they interact with other frameworks.

Last updated: · 3 min read

What Are IFRS S1 and S2?

The International Sustainability Standards Board (ISSB), part of the IFRS Foundation, published its first two sustainability disclosure standards in June 2023:

  • IFRS S1 — General Requirements for Disclosure of Sustainability-related Financial Information: Establishes the framework for disclosing material sustainability-related risks and opportunities
  • IFRS S2 — Climate-related Disclosures: Specific requirements for climate-related disclosure, building on TCFD recommendations

Together, they create a global baseline for investor-focused sustainability disclosure, designed to be adopted by individual jurisdictions alongside their existing financial reporting requirements.

Who They Apply To

ISSB standards apply when adopted by national jurisdictions. Application varies:

  • UK: Sustainability Disclosure Requirements based on ISSB, phased from 2025
  • Australia: Mandatory climate disclosure based on ISSB from 2025
  • Canada: ISSB-based climate disclosure for large companies from 2025
  • Japan: ISSB-aligned disclosure from 2025
  • Singapore, Hong Kong: Phased adoption from 2025-2027
  • Additional jurisdictions are in consultation or adoption processes

Key Requirements

IFRS S1 — General 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
  • Cover all sustainability topics, not just climate
  • Apply single (financial) materiality
  • Follow four TCFD pillars: Governance, Strategy, Risk Management, Metrics & Targets
  • Connected with financial statements — sustainability information should be consistent with financial reporting

IFRS S2 — Climate-related Disclosures:

  • Governance: Board and management oversight of climate-related risks and opportunities
  • Strategy: Climate-related risks and opportunities, their effects, climate resilience assessment (scenario analysis)
  • Risk management: Processes for identifying, assessing, prioritizing, and monitoring climate risks
  • Metrics and targets: Scope 1, 2, and 3 GHG emissions, transition plan disclosures, climate-related targets

Cross-cutting requirements:

  • Disclose in connection with related financial statements
  • Report at the same time and for the same period as financial statements
  • Include comparative information
  • Use reasonable and supportable information without undue cost or effort

Timeline

  • June 2023: IFRS S1 and S2 published
  • January 2024: Standards effective for annual reporting periods beginning on or after this date
  • 2024-2026: National jurisdictions adopting and transposing into local requirements
  • Transition reliefs: Companies applying for the first time can claim various reliefs, including exemption from Scope 3 and comparative data in the first year

Compliance Steps

  1. Determine jurisdiction requirements: Check whether your jurisdiction has adopted ISSB and any local modifications
  2. Assess materiality: Identify sustainability topics creating financial risks or opportunities (financial materiality focus)
  3. Climate disclosure preparation: Build GHG inventory (Scopes 1, 2, 3), conduct climate scenario analysis, document transition plans
  4. Governance documentation: Ensure board and management roles in sustainability oversight are clearly defined
  5. Integration with financial reporting: Ensure consistency between sustainability and financial disclosures
  6. Metrics and targets: Establish measurable targets for material sustainability topics
  7. Reporting: Prepare disclosures as part of general purpose financial reports

How Council Fire Can Help

Council Fire helps organizations implement ISSB-aligned disclosure — from materiality assessment and GHG inventory through scenario analysis and integrated reporting. We navigate the intersection of ISSB, CSRD, and national requirements. Contact us for ISSB implementation support.

ISSB: IFRS Sustainability Disclosure Standards (S1 & S2) — sustainability in practice

📝 From #AroundTheFire

ESG Reporting Compliance: The Complete 2026 Strategic Guide ↗The Complete Guide to Corporate Sustainability Strategy ↗

CSRD Readiness Checklist

Assess your organization's readiness for EU sustainability reporting.

Get Free Resource

Frequently Asked Questions

IFRS S1 (General Requirements) establishes the overall framework for sustainability-related financial disclosure — it requires companies to disclose material information about sustainability risks and opportunities across all topics. IFRS S2 (Climate-related Disclosures) provides specific requirements for climate disclosure, including GHG emissions, transition plans, and scenario analysis. S2 is a topical application of S1's general framework.
As of early 2026, jurisdictions adopting or basing requirements on ISSB include: UK, Australia, Canada, Japan, Singapore, Hong Kong, Nigeria, Turkey, Brazil, and several others. Each jurisdiction may modify adoption (e.g., phased implementation, proportionality for smaller companies). The EU has its own standards (ESRS) but has committed to interoperability with ISSB.
ISSB focuses on financially material information for investors (single materiality). CSRD/ESRS requires double materiality — both financial impacts and impacts on people/environment. ISSB is less prescriptive and has fewer datapoints. ESRS has more detailed, granular requirements. Companies in scope for both can use ESRS to satisfy much of ISSB, but differences exist in some areas.
Get Compliance Help

Need compliance support?

Navigating ISSB: IFRS Sustainability Disclosure Standards (S1 & S2) requirements is complex. Council Fire’s regulatory experts can guide your compliance strategy.

Get Compliance Help