IFRS S1 and S2: the metrics explained

IFRS: a big step towards harmonisation of global ESG reporting

The publication of the ISSB’s ‘General Requirements’ (IFRS S1) and ‘Climate-related Disclosures’ (IFRS S2) in June 2023 marked a huge step forward in the global harmonisation of ESG reporting. The standards have incorporated and subsumed many different frameworks that previously existed in the so-called ‘alphabet soup’ of acronyms in the ESG framework space. With several governments pledging support to the initiative (such as the UK, Mexico, Canada, Singapore, Hong Kong and Japan) and Brazil recently mandating reporting under the ISSB standards, IFRS S1 and S2 are looking likely to become the global baseline for sustainability-related financial reporting. Because the standards only focus on financially material information, IFRS S1 and S2 provides a good foundation for many regulatory regimes. We believe that some more stringent requirements that incorporate double materiality, such as CSRD, will continue to proliferate, as transparency improves.

The standards are largely qualitative in nature, with quantitative metrics mainly included in the S2 climate-related metrics and targets, as well as the SASB industry-specific metrics, which are referenced in the standards. This whitepaper provides an explanation to the structure of the metrics within IFRS S1 and S2 and provides some insight into how to report on the standards. Please download the whitepaper using the form below, and get in touch with our team of compliance experts for more information.

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