In the evolving landscape of sustainability disclosure frameworks and regulations, the International Sustainability Standards Board’s (ISSB) inaugural standards bring consolidation and alignment to the sustainability disclosure field. IFRS S1 and IFRS S2 (IFRS S1/S2), issued by the ISSB in June 2023, will broadly influence both corporate strategies and market dynamics.

All companies can start applying IFRS S1/S2 now, which became effective for annual reporting as of January 1, 2024. IFRS S1/S2 will become mandatory when and if regulators integrate them into financial reporting frameworks and regulatory requirements.

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The adoption of the standards has been swift; several regulatory bodies and jurisdictions have declared intent to mandate disclosure aligned with IFRS S1/S2, while others will use the standards as a baseline to draft new disclosure regulations.

To comply with this new framework, companies will need to align their financial and non-financial reporting practices, ensuring their consistency and comparability.

Corporates should not see these standards as another standalone reporting framework. IFRS S1/S2 have consolidated and incorporated several familiar frameworks (TCFD, SASB, CDSB, and others). Although it may take time for companies to notice a reduction in reporting burden, these standards signal that the industry is headed toward meaningful alignment.

To assist companies on their journey to understand and prepare for IFRS S1/S2 reporting, this briefing explores the essential components of the IFRS S1/S2 standards, maps the consolidation of reporting frameworks, and provides actionable recommendations companies can take to tackle the task ahead.

Author contacts

Catherine Osborn - Senior Manager Consulting & Research
Katie Langemeier - Research & Consulting Senior Associate