IFRS S1 and S2 (ISSB)
The global baseline for investor-focused sustainability and climate disclosures, issued by the International Sustainability Standards Board. Effective for reporting periods starting on or after 1 January 2024. Increasingly relevant for Kenyan and other African companies as ISSB-aligned regimes are adopted across the continent.
What it is
IFRS S1 and IFRS S2 are the first two global sustainability disclosure standards issued by the International Sustainability Standards Board, part of the IFRS Foundation that also oversees the IFRS Accounting Standards used for financial reporting. They were issued on 26 June 2023 and are effective for annual reporting periods beginning on or after 1 January 2024.
IFRS S1 — General Requirements for Disclosure of Sustainability-related Financial Information sets the overarching requirements for disclosing sustainability-related risks and opportunities that could reasonably be expected to affect a company’s cash flows, access to finance, or cost of capital. It applies to all sustainability-related topics, not just climate.
IFRS S2 — Climate-related Disclosures sets specific requirements for climate-related risks and opportunities, with detailed expectations around governance, strategy, risk management, scenario analysis, and metrics & targets — including greenhouse gas emissions across Scopes 1, 2, and 3.
Both standards organize disclosures into the same four core content areas: governance, strategy, risk management, and metrics & targets. That structure incorporates and builds on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and from 2024 the ISSB has formally taken over TCFD’s monitoring role. IFRS S2 also integrates industry-based metrics drawn from SASB and references the GHG Protocol for emissions measurement, consolidating several earlier frameworks into a single investor-oriented standard.
The standards are designed to provide a global baseline — a common foundation that regulators in different jurisdictions can adopt or build on. They’re built on the same conceptual foundations as the IFRS Accounting Standards, so sustainability disclosures are designed to integrate with financial statements rather than sit alongside them.
Who needs it
ISSB is a baseline, not itself a law — but a growing number of jurisdictions are adopting IFRS S1/S2 (or local equivalents) as mandatory.
Australia has introduced AASB S1 and S2, with phased application starting from 2025 for the largest companies. The United Kingdom is developing UK Sustainability Reporting Standards based on ISSB. Hong Kong, Singapore, and Japan have all moved toward ISSB-aligned mandatory regimes. Brazil, Nigeria, Türkiye, Ghana, and Uganda have published jurisdictional roadmaps for adoption. The IFRS Foundation maintains a public adoption tracker showing the growing list.
In jurisdictions where IFRS S1/S2 hasn’t been adopted yet, the standards are increasingly used voluntarily by companies preparing for future mandatory regimes, by listed companies meeting investor expectations, and by companies in the value chains of larger regulated entities.
For a mid-sized company outside an ISSB-adopting jurisdiction, the most common driver is investor pressure or anticipated future regulation. Listed companies and companies preparing for IPO often adopt IFRS S1/S2 voluntarily because their investors expect it. Private companies sometimes adopt the climate-specific S2 alongside GHG Protocol reporting because their banks or large customers ask for ISSB-aligned data.
How to start
If you’re new to IFRS S1/S2, start with S2. The climate disclosures are where most early reporters focus, and they’re the part that most directly maps to the GHG Protocol emissions data you may already be collecting.
If you’ve reported under TCFD before, the transition to IFRS S2 is largely a matter of expanding the scope and adding industry-based SASB metrics. The four core content areas are the same.
Common questions
Questions teams ask about IFRS S1 & S2.
Also working with the other frameworks?
We’re early and building deliberately.
If you’re developing or investing in this space, we’d like to hear from you.