The ISSB was established in November 2021 to develop a comprehensive global baseline of high-quality sustainability disclosure standards to meet investors’ information needs. In March 2022, the ISSB launched a consultation on its first draft IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2). After a consultation period of 120 days, the ISSB redeliberated the proposals in the draft standards and decided to finalize the proposals.

Key requirements

The main requirements in IFRS S1 broadly reflect the proposals in ED/2022/S1 General Requirements for Disclosure of Sustainability-Related Financial Information with changes introduced in the following areas:

• The concept of “enterprise value”
• The breadth of the reporting required
• The use of the term “significant” for sustainability-related risks or opportunities
• Identifying material sustainability-related risks and opportunities and information to disclose (including using the work of other standard-setters)
• Application of the materiality assessment
• Connected information
• Frequency (or timing) of reporting
• Comparative information and updated estimates
• Proportionality of the requirements
• Current and anticipated financial effects of sustainability-related and climate-related risks and opportunities on an entity’s financial performance, financial position and cash flows

Effective date and transition

An entity is required to apply IFRS S1 for annual reporting periods beginning on or after January 1, 2024. Earlier application is permitted. If an entity applies IFRS S1 earlier, it is required to disclose that fact and apply IFRS S2 at the same time.

The following transitional reliefs are available:

• Comparative information: An entity is not required to disclose comparative information in the first annual reporting period in which it applies IFRS S1.
• Timing of reporting: In the first annual reporting period in which an entity applies IFRS S1, the entity is permitted to report its sustainability-related financial disclosures after it publishes its related financial statements (as specified in IFRS S1).
• Information on sustainability-related risks and opportunities other than climate: In the first annual reporting period in which an entity applies IFRS S1, the entity is permitted to disclose information on only climate-related risks and opportunities (in accordance with IFRS S2) and consequently apply the requirements in IFRS S1 only insofar as they relate to the disclosure of climate-related financial information.

Additional information

The following additional information is available on the IFRS Foundation website and on Canada Centre for Financial Reporting (CFR):

• ISSB press release
• Basis for conclusions on S1
• Effects analysis on IFRS S1 and IFRS S2
• Project summary of IFRS S1 and IFRS S2
• Feedback statement for IFRS S1 and IFRS S2
• Our CFR summary of IFRS S1
• Our CFR project page on General requirements