IFRS S1 and S2 apply primarily to companies preparing general-purpose financial reports that operate in jurisdictions mandating these standards, typically targeting public, listed, and large entities with significant climate or sustainability risks. They became effective for annual reporting on or after January 1, 2024, enabling firms to disclose material sustainability-related risks.
There is no requirement to report under IFRS S1 & S2 until they are adopted into legislation. Public and private companies can voluntarily disclose climate and sustainability information in accordance with IFRS S1 and S2 from January 2024.
IFRS S1 and IFRS S2 become mandatory when regulators in jurisdictions integrate them into financial reporting frameworks and regulatory requirements.
IFRS S1 sets the general standard for disclosing sustainability-related risks and opportunities. IFRS S2 focuses specifically on climate-related risks, including both physical and transition risks.
All companies can start applying IFRS S1/S2 now, which became effective for annual reporting as of January 1, 2024. IFRS S1/S2 will become mandatory when and if regulators integrate them into financial reporting frameworks and regulatory requirements.
The applicability of preparing BRSR is based on the condition of whether the listed entity (irrespective of its status of being a holding or a subsidiary or another company) falls under the list of top 1000 listed entities based on market capitalization.
In 2025, ESG reporting is shifting from voluntary to mandatory in many regions. New regulations in the EU, US, and UK require companies to publish environmental and social performance data alongside financial results.
However, environmental, economic, social, and human sustainability focuses on preserving future generations and improving the quality of life. We're exploring the link between these pillars and climate change, and how effectively incorporating them into our processes can help combat the climate crisis.
The information contained in the sustainability report contributes to provide insight into the sustainability risks and opportunities of the undertaking. It is intended primarily for financial stakeholders, such as shareholders, banks, creditors, and other financiers.
These are: IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information; and; IFRS S2 Climate-related Disclosures.
The short answer is that all companies should have some form of sustainability reporting in place. For many, this is — or soon will be — a direct legal requirement, while for others it has become an expectation from customers, investors, and other stakeholders.
It provides a comprehensive framework for preparing and presenting financial statements that are relevant, reliable and understandable. While publicly traded companies in Canada must use IFRS, private companies can choose ASPE or IFRS.
Under Chapter 2M of the Corporations Act (Ch 2M), entities that are required to prepare an annual financial report under Ch 2M for a financial year, and meet one of the sustainability reporting thresholds in s292A, are required to prepare a sustainability report.
While IFRS compliance is not mandatory for all companies, certain entities are required to follow Ind-AS, including: Listed companies. Unlisted companies with a net worth of Rs. 250 crore or more.
What are the four pillars of IFRS S1 and S2? The four pillars of IFRS S1 and S2 are governance, strategy, risk management and metrics and targets.
It applies to large public-interest entities with more than 500 employees. Companies in scope are required to disclose information in their annual reports on environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters.
ESG reporting helps investors assess risk, while sustainability reporting focuses on a company's environmental and social impact.
The core of ESG is Environmental, Social, and Governance, but some frameworks add a fourth pillar, often Disclosure, Transparency, or even Economic Performance, to create a holistic view of a company's long-term sustainability and responsibility beyond just profits, covering planet, people, and ethical practices.
The Ps refer to People, Planet, and Profit, also often referred to as the triple bottom line. Sustainability has the role of protecting and maximising the benefit of the 3Ps.
EU rules require large companies and listed companies to publish regular reports on the social and environmental risks they face, and on how their activities impact people and the environment.
At the midpoint of 2025, the ESG landscape continues to evolve amid rising political rhetoric and regulatory change. While some believe that ESG is losing momentum, the reality is that the business case for ESG remains strong.
Accountants play a key role in ESG reporting by ensuring businesses meet ESG compliance requirements. They help organisations track ESG data, assess sustainability ESG reporting obligations, and prepare accurate financial reporting related to corporate sustainability.