New IFRS sustainability standards already from 2024

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures

Many talks currently happen around European Sustainability Reporting Standards (ESRS) – according to which the Corporate Sustainability Reporting Directive requires large companies with 500 employees that are currently subject to the EU Non-Financial Directive to publish a Sustainability Report as early as for the 2024 reporting year.

Although at the international level, IFRS Sustainability reporting standards are also coming. They are developed by the ISSB (International Sustainability Standards Board). The goal is to create a foundation for the global sustainability reporting that is focused on the report users. 

To achieve this goal, the first general standard IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information sets the basis for reporting on all sustainability matters - strategy, risk management and related indicators, and goals.

The second standard, IFRS S2 Climate-related Disclosures, includes more detailed guidance on reporting risks and opportunities related to climate change.

Official standards already came into effect on January 1, 2024, while only individual jurisdictions decide on their immediate implementation.

The following jurisdictions have already started their ISSB standards adoption journey:

Although ESRS standards remain the priority in the EU, multinational corporations that also operate outside of Europe should closely follow the updates on the geography of implementation for IFRS S1 and S2. Those must also pay attention to the comparability and compatibility of both standards when creating their sustainability report.

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