Dr. Hanne Böckem
Partner, Audit, DPP
KPMG AG Wirtschaftsprüfungsgesellschaft
On 26 June 2023, the International Sustainability Standards Board (ISSB) published the first two IFRS Sustainability Disclosure Standards IFRS S1 General requirements for the disclosure of sustainability-related financial information and IFRS S2 Climate-related disclosures. The standards contain requirements for the disclosure of material information about an entity's significant sustainability-related risks and opportunities that are necessary for investors to evaluate the entity. They essentially reflect the draft standards published in March 2022 and partially implement the feedback received during the consultation process (cf. in detail the accompanying feedback statement).
IFRS S1 establishes general requirements with the objective of requiring an entity to disclose information about its sustainability-related risks and opportunities. IFRS S1 prescribes how an entity should prepare and present its sustainability-related financial information. It sets out general requirements for the content and presentation of these disclosures so that the information disclosed is useful to primary users of financial reporting in making decisions about the provision of resources to the entity.
IFRS S2 sets out requirements for identifying, assessing and disclosing information about climate-related risks and opportunities that is useful to the primary users of general purpose financial reporting.
The two standards are to be applied for reporting periods beginning on or after 1 January 2024. Earlier application is permitted. If an entity applies IFRS S1 earlier, it must disclose this accordingly and apply IFRS S2 at the same time. The mandatory application of the ISSB standards is dependent on their adoption by a jurisdiction into applicable law. This does not affect entities' ability to apply the standards voluntarily (in addition).
The standards and other materials can be downloaded from the ISSB website.