Governance Briefing — June 26, 2023

Executive briefing: On 26 June 2023 the IFRS Foundation’s International Sustainability Standards Board (ISSB) published its first two standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The standards set out governance, strategy, risk management, and metrics disclosures designed to interoperate with jurisdictional requirements such as CSRD.

Key requirements

Governance disclosures. IFRS S1 mandates reporting on governance processes, controls, and procedures used to monitor sustainability-related risks and opportunities.
Climate metrics. IFRS S2 requires climate-related targets, transition planning, and greenhouse gas emissions disclosures aligned with the Greenhouse Gas Protocol.
Connectivity. Preparers must connect sustainability information with financial statements, using the same reporting entity and reporting period.

Implications for boards

Global issuers. Boards should integrate ISSB requirements into reporting control frameworks and coordinate with audit committees on assurance readiness.
Financial institutions. Banks and asset managers can leverage the baseline to harmonise disclosures across jurisdictions and support investor comparisons.
Public sector companies. State-owned enterprises preparing sustainability reports should map ISSB governance disclosures to national requirements.

Action checklist

Perform gap analyses between existing sustainability reporting and IFRS S1/S2 governance, risk, and metrics disclosures.
Align board and management reporting cycles to support connected financial and sustainability statements.
Plan assurance engagements and data governance investments that support ISSB-compliant reporting.

Sources

Zeph Tech equips reporting teams to operationalise IFRS S1 and S2 governance disclosures alongside jurisdictional mandates.