In June 2023, the International Sustainability Standards Board (ISSB) issued its first two IFRS Sustainability Disclosure Standards:  IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures). These standards require organizations to disclose information that enables investors to assess the effects of significant sustainability-related risks and opportunities on the organization’s enterprise value, and it also establishes requirements specific to climate-related risks and opportunities.

IFRS S1 requires organizations to disclose sustainability-related financial information using an approach consistent with the recommendations for the TCFD [Task Force on Climate-Related Financial Disclosures] while IFRS S2 applies a similar approach to S1, requiring organizations to provide climate-related financial disclosures considering the governance, strategy, risk management and metrics and targets.

The new standards will be effective from 1 January 2024 and will require each jurisdiction to endorse the standards which will provide transitional reliefs for organisations in the first year of reporting.