Two-minute brief
ISSB Standards (IFRS S1 and S2) requirements explained: video brief
A two-minute brief on what IFRS S1 and IFRS S2 require of a reporting company.
Key takeaways
- IFRS S1 sets general requirements; IFRS S2 applies them to climate.
- Disclosures must be useful to investors, lenders and other creditors.
- Four core content areas build on the TCFD recommendations.
- IFRS S2 includes greenhouse gas emissions metrics and targets.
- Jurisdictions decide whether and when the standards apply.
General requirements and climate
IFRS S1 sets the general requirements for disclosing any sustainability-related risk or opportunity; IFRS S2 applies them to climate and adds specific metrics. Both follow the same four core content areas, governance, strategy, risk management, and metrics and targets, which are drawn from the TCFD recommendations. This short film walks through them.
IFRS S1 asks a company to disclose information about sustainability-related risks and opportunities that is useful to investors, lenders and other creditors deciding whether to provide resources, applying a materiality test, and to consider the SASB disclosure topics when identifying industry-specific risks and opportunities. In practice materiality is judged from an investor's point of view, using thresholds settled with the finance team, and disclosures prepared alongside the financial statements.
The four core content areas
Governance covers the processes, controls and procedures used to monitor and manage sustainability-related and climate-related risks and opportunities, and who oversees them. Strategy covers how those risks and opportunities affect the business model, value chain, strategy and financial position, including, for climate, scenario analysis. Risk management covers how the company identifies, assesses, prioritises and monitors those risks. Metrics and targets cover performance, including, under IFRS S2, greenhouse gas emissions and the targets the company has set.
Issued in June 2023, the two standards are effective for annual reporting periods beginning on or after 1 January 2024, where a jurisdiction adopts them or a company applies them; IFRS S2 was amended in December 2025 for greenhouse gas emissions, effective from 1 January 2027 with early application permitted. The ISSB sets standards and certifies no one; where a jurisdiction requires assurance, an independent assurance provider gives the conclusion.
IFRS S1 is the general standard, covering all sustainability-related risks and opportunities that could influence investors' decisions, and IFRS S2 the climate standard. In the first annual reporting period a company may limit its disclosures to climate-related risks and opportunities and need not disclose Scope 3 emissions. IFRS S1 and IFRS S2 fully incorporate the TCFD recommendations, so a TCFD report maps onto the four core content areas.
ISSB IFRS S1 / S2 at a glance
- Purpose
- Investor-focused disclosure of the sustainability-related and climate-related risks and opportunities that could influence decisions to provide resources to your company
- Relevant to
- Companies whose regulator or exchange has introduced ISSB-based rules, groups whose investors, lenders or parent company ask for the standards, and any company choosing to apply them
- Edition
- IFRS S1 and IFRS S2, issued June 2023, effective for annual reporting periods beginning on or after 1 January 2024; IFRS S2 amended in December 2025 for greenhouse gas emissions, effective 1 January 2027 with early application permitted
- Certification
- None. The ISSB sets standards and certifies no one; where your jurisdiction requires assurance, an independent assurance provider gives the conclusion
- Sterling's role
- Design and implementation of the reporting programme with your team, Effivity, training and assurance readiness, then Sustain™
- Cost and timing
- Total investment for an ISSB reporting programme depends on the current maturity of your processes, the scope, locations and number of employees. The process typically takes 5 to 9 months
ISSB IFRS S1 / S2: questions people ask
Is there such a thing as ISSB certification?
No. The ISSB is a standard-setter: it issues IFRS S1 and IFRS S2 and certifies no one. A company applies the standards and says so in its report; where its jurisdiction requires assurance, or its board chooses it, an independent assurance provider examines the disclosures and gives a limited or reasonable assurance conclusion on that report. A seal or badge from anyone else is marketing, not evidence.
Are the ISSB Standards mandatory for us?
Only if your jurisdiction makes them so, or a regulator, exchange or parent company requires them. The standards' own effective date, annual periods beginning on or after 1 January 2024, applies when a company chooses to apply them; an adopting jurisdiction sets its own scope, first year and modifications. Confirm your position with your regulator or legal adviser, and we plan to that answer.
Which jurisdictions use or are introducing the ISSB Standards?
The ISSB keeps its own record. Its jurisdictional profiles and snapshots page, last updated on 24 September 2026, has profiles for jurisdictions including Australia, Singapore, Malaysia, the Philippines, Hong Kong SAR, Japan, Sri Lanka, Qatar, Türkiye, Nigeria and Brazil, and snapshots for others including the United Kingdom, Canada, China, South Korea, Indonesia and Thailand; a profile for Oman is marked as forthcoming. Each describes that jurisdiction's own approach and timetable, so read the one where you report, then the local rule itself.
What is the difference between IFRS S1 and IFRS S2?
IFRS S1 is the general standard: it requires information about all sustainability-related risks and opportunities that could influence investors' decisions, organised in the four core content areas, and asks you to consider the SASB disclosure topics for your industry. IFRS S2 applies that structure to climate and adds specific requirements, including Scope 1, 2 and 3 greenhouse gas emissions and the industry-based metrics in its accompanying guidance. Either may be applied early only together with the other.
Can we report on climate only in the first year?
Yes, if you take the transition relief. In the first annual reporting period a company may limit its disclosures to climate-related risks and opportunities, publish after its financial statements within the limit the relief sets (the ISSB summarises it as no later than nine months after the end of the reporting period) and omit comparative information. A company that reports on climate only in year one need not give comparatives for the other topics in year two. Your jurisdiction's version may set its own reliefs.
Keep exploring
Related to this video
The complete guide
Everything on ISSB IFRS S1 / S2
Start with the ISSB IFRS S1 / S2 page, or go straight to the guide you need.
On the ISSB IFRS S1 / S2 page
- What are the main IFRS S1 and IFRS S2 requirements?
- How do you report under the ISSB Standards?
- How much does ISSB reporting cost?
- How long does ISSB reporting take?
- Who needs to report under the ISSB Standards?
- How ISSB reporting supports investors, lenders and better decisions
- Frequently asked questions about the ISSB Standards
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