When is reporting under IFRS S1 and IFRS S2 required?
While the official effective date for annual reporting is for periods beginning on or after 1 January 2024, to facilitate initial application the ISSB has provided temporary transition relief as follows:10
‘Climate first’ reporting — This permits an entity in the first year of applying IFRS S1 to disclose only climate-related risks (in accordance with IFRS S2). The additional IFRS S1 disclosures will be required in the second year of application.
Scope 3 GHG emissions — IFRS S2 provides relief from disclosing Scope 3 emissions in the first year of reporting. It also provides relief from the requirement to disclose emissions in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) in the event of a conflicting requirement by a jurisdiction or exchange to use a different method.
Timing of reporting — Rather than reporting sustainability-related disclosures at the same time as their financial statements, in the first period of reporting entities may report their annual sustainability-related disclosures along with their half-year reports.
Comparative information is not required until the year following adoption of this standard. Accordingly, if an entity opts for ‘climate first’ reporting, it would be required to report comparative information only for climate-related risks and opportunities in year two; comparative information for other sustainability risks and opportunities, and Scope 3 emissions, would not be required until the year following initial disclosure.
A separate brief focusses on the general sustainability disclosure requirements addressed in IFRS S1. The balance of this brief will focus on the requirements of IFRS S2.