In 2023 the International Sustainability Standards Board (ISSB), part of the IFRS Foundation, issued its first two standards — IFRS S1 and IFRS S2. Together they have rapidly become the global baseline for sustainability-related financial disclosure, the reference point that other regimes increasingly map to and that a growing list of jurisdictions are adopting or endorsing.
What S1 and S2 are
IFRS S1 sets out the general requirements for disclosing sustainability-related risks and opportunities that could reasonably affect a company's prospects — its cash flows, access to finance and cost of capital. IFRS S2 is the climate-specific standard, covering climate-related risks and opportunities in detail. S1 is the framework; S2 is the first topic built on it, with more topics expected over time.
Built on the TCFD structure
Both standards follow the four-pillar structure made familiar by the Task Force on Climate-related Financial Disclosures (TCFD): governance, strategy, risk management, and metrics and targets. Responsibility for monitoring corporate climate disclosures transferred from the TCFD to the ISSB, which makes IFRS S2 the natural successor to TCFD reporting rather than a parallel track.
What they require
- Governance: how the board and management oversee sustainability and climate matters.
- Strategy: the material risks and opportunities, and their effects on the business model and finances — including climate scenario resilience.
- Risk management: how these risks are identified, assessed and managed within enterprise risk processes.
- Metrics and targets: Scope 1, 2 and 3 emissions, transition plans, and the targets used to manage performance.
Who must comply
The ISSB sets the standards; it does not by itself make them mandatory. Application depends on each jurisdiction's adoption decisions, and many markets are now adopting, endorsing or building on IFRS S1 and S2 on their own timelines. The practical implication is to check your specific jurisdiction's status — but the direction is clearly toward IFRS S1/S2 as the common denominator of investor-grade disclosure.
How it relates to CSRD, CDP and BRSR
IFRS S1/S2 overlap substantially with the EU's CSRD/ESRS, with CDP (whose questionnaire is aligned to the structure), and with India's BRSR. The standards share emissions data, governance, risk processes and targets. Companies facing more than one regime should build a single governed data backbone and map outward, rather than running parallel reporting efforts.
How to prepare
Start with a materiality assessment, then build the data architecture and controls for the material topics, deepen Scope 3 on the categories that matter, formalise governance, and sequence an assurance roadmap. Done once, this backbone serves IFRS S1/S2 and every overlapping framework at a falling marginal cost.
Sources & further reading
This article is general information, not legal, financial or compliance advice. The regulations and standards referenced here evolve; verify the current position with the issuing body, or ask us. Published June 2026.