The IFRS Foundation has released a new implementation guide designed to assist companies in applying the International Sustainability Standards Board (ISSB) standards when reporting solely on climate-related information.
The guide specifically addresses the correct application of IFRS S2 Climate-related Disclosures for entities opting for a “climate-first” reporting approach. It clarifies that even when reporting only climate-related information, companies must still adhere to the relevant general requirements outlined in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.
Background and Rationale:
This guidance responds to stakeholder feedback received during the development of IFRS S1 and S2. While investors strongly emphasized the critical and immediate need for standardized climate-related data, other stakeholders expressed concerns regarding the feasibility and availability of broader sustainability-related information in the initial phases of adoption. The “climate-first” option, part of the ISSB’s suite of transition reliefs, aims to balance this urgent investor demand for climate data with practical implementation challenges faced by companies.
The publication forms a key part of the ISSB’s ongoing efforts to support preparers in generating clear, consistent, and decision-useful sustainability disclosures. By providing specific guidance for climate-only reporting, the IFRS Foundation aims to:
- Enhance the quality and comparability of climate disclosures under IFRS S2.
- Facilitate smoother implementation for companies starting their ISSB reporting journey.
- Ensure investors receive the material climate information they require for decision-making, even as companies build capacity for broader sustainability reporting.
Source: IFRS News, 30 January 2025.