IFRS

The IFRS standards were developed by the ISSB (International Sustainability Standards Board) and were published in 2023. They comprise a set of two standards that have a single materiality approach, useful to users of general-purpose financial reports in making decisions relating to providing resources to the entity. :

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information requires an organization to disclose information about its sustainability-related risks and opportunities reasonably expected to affect the entity’s cash flows, its access to finance, or its cost of capital over the short, medium, or long term. It sets how an entity prepares and reports its sustainability-related financial disclosures including general requirements for the content and presentation of those disclosures so that the information is useful to users in making decisions.

The disclosures concern:

  1. the governance processes, controls, and procedures the entity uses to monitor, manage, and oversee sustainability-related risks and opportunities;
  2. the entity’s strategy for managing sustainability-related risks and opportunities;
  3. the processes the entity uses to identify, assess, prioritize, and monitor sustainability-related risks and opportunities; and
  4. the entity’s performance concerning sustainability-related risks and opportunities, including progress towards any targets the entity has set or is required to meet by law or regulation.

 

IFRS S2 Climate-related Disclosures requires an entity to disclose information about its climate-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance, or cost of capital over the short, medium,m or long term. It applies to: climate-related physical and transition risks to which the entity is exposed, and climate-related opportunities available to the entity. 

The requirements for an entity to disclose information that enables users of general-purpose financial reports to understand:

  1. the governance processes, controls, and procedures the entity uses to monitor, manage,e and oversee climate-related risks and opportunities;
  2. the entity’s strategy for managing climate-related risks and opportunities;
  3. the processes the entity uses to identify, assess, prioritize and monitor climate-related risks and opportunities, including whether and how those processes are integrated into and inform the entity’s overall risk management process; and
  4. the entity’s performance concerning its climate-related risks and opportunities, including progress towards any climate-related targets it has set, and any targets it is required to meet by law or regulation.