Governance Briefing — IFRS S1 and S2 effective date
IFRS S1 and IFRS S2 become effective for annual reporting periods beginning on or after 1 January 2024, requiring boards to oversee sustainability-related disclosures and climate risk governance.
Executive briefing: The International Sustainability Standards Board issued IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures on 26 June 2023. The standards are effective for annual reporting periods beginning on or after 1 January 2024. Boards must oversee sustainability governance, risk management, strategy, and metrics disclosures, ensuring consistency with financial statements and investor expectations.
Key governance signals
- Governance disclosures. Entities must describe governance processes, controls, and procedures used to monitor sustainability and climate-related risks.
- Integration. IFRS S1 requires linking sustainability information to financial planning, risk management, and performance measures.
- Climate focus. IFRS S2 mandates climate scenario analysis, transition plans, and emissions disclosures governed by the board.
Action checklist
- Align board and management responsibilities with IFRS S1/S2 governance disclosure requirements.
- Integrate sustainability data into internal control frameworks to support assurance and investor scrutiny.
- Coordinate sustainability and finance teams to ensure consistency between sustainability disclosures and financial statements.
Enablement moves
- Deliver training for directors and executives on IFRS S1/S2 expectations and investor use cases.
- Implement data platforms capturing climate metrics, scenario outputs, and governance evidence.
- Engage assurance providers to assess readiness for limited or reasonable assurance mandates.
Sources
Zeph Tech helps issuers implement IFRS S1/S2 by aligning governance narratives, data controls, and assurance pathways.