What is IFRS S1?

Quick Answer: IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) is a global sustainability disclosure standard published by the International Sustainability Standards Board (ISSB) in June 2023. It requires companies to disclose material sustainability-related risks and opportunities across four areas: governance, strategy, risk management, and metrics and targets. IFRS S1 applies to any company reporting under IFRS Accounting Standards and is designed to give investors consistent, comparable information for financial decision-making.

What is IFRS S1?

IFRS S1 is the foundational standard in the ISSB's suite of sustainability disclosure requirements. It sets out the general framework that companies must follow when reporting sustainability-related financial information, covering everything from how risks are identified to how targets are tracked and disclosed.

Published alongside IFRS S2 (which focuses specifically on climate), IFRS S1 is the broader of the two standards. It applies to all sustainability-related risks and opportunities, not just climate, and establishes the baseline disclosure requirements that IFRS S2 builds on.

The ISSB, a body the IFRS Foundation created in response to growing investor demand for reliable, standardised sustainability data, developed the standard. It consolidates earlier voluntary frameworks, including the TCFD recommendations, the SASB Standards, and the Integrated Reporting Framework, into a single coherent set of requirements.

What does IFRS S1 require companies to disclose?

IFRS S1 organises its disclosure requirements around four content elements, drawn directly from the TCFD framework:

• Governance: How the company's board and senior management oversee sustainability-related risks and opportunities
• Strategy: How sustainability risks and opportunities affect the company's business model, financial position, and long-term planning
• Risk management: The processes used to identify, assess, prioritise, and monitor sustainability-related risks
• Metrics and targets: The quantitative and qualitative measures used to track performance against sustainability goals

IFRS S1 also requires companies to disclose industry-specific information, using SASB Standards as a reference point for identifying which sustainability topics are most relevant to their sector.

The disclosures must cover the short, medium, and long term, and companies must present them alongside the financial statements as part of their general purpose financial reports.

How does IFRS S1 relate to IFRS S2?

IFRS S1 and IFRS S2 work as a pair. IFRS S1 sets the general requirements; IFRS S2 applies those requirements specifically to climate-related risks and opportunities, adding further detail on greenhouse gas emissions reporting, scenario analysis, and physical and transition risk disclosures.

A company applying IFRS S2 must also apply IFRS S1. The two standards share the same four-pillar structure, which means companies already familiar with TCFD reporting will find the transition to ISSB Standards relatively straightforward.

One practical distinction: IFRS S1 allows companies to use reasonable and supportable information available without undue cost or effort. This proportionality mechanism means the standard is designed to work across companies of different sizes and reporting maturity, not just large multinationals with dedicated sustainability teams.

Why does IFRS S1 matter for sustainability and compliance managers?

For anyone responsible for sustainability reporting at a company without a large internal team, IFRS S1 represents a significant shift in how companies are expected to produce and present sustainability information.

The standard moves sustainability disclosures firmly into the financial reporting domain. Sustainability-related information must cover the same reporting period as the company's financial statements, be subject to the same quality standards (relevance, faithful representation, comparability, verifiability), and support assurance.

This has practical implications:

• Sustainability data needs to be traceable, documented, and defensible, not just directionally accurate
• Companies need to clearly define and disclose governance structures around sustainability
• Metrics must be consistent year-on-year to allow investors to track progress

For companies that have previously relied on narrative sustainability reports or high-level carbon estimates, IFRS S1 raises the bar considerably. The standard expects disclosures that are specific, connected to financial outcomes, and grounded in a documented methodology.

Which companies need to comply with IFRS S1?

IFRS S1 is not automatically mandatory in every country. The ISSB publishes the standard; individual jurisdictions decide whether and how to adopt it into their regulatory frameworks.

As of 2025, a growing number of jurisdictions have adopted or are in the process of adopting ISSB Standards, including the UK (through the UK Sustainability Reporting Standards process), Australia, Canada, Singapore, and several others. The International Organization of Securities Commissions (IOSCO) has endorsed the ISSB Standards and encouraged their adoption globally.

In practice, IFRS S1 is most immediately relevant to:

• Listed companies in jurisdictions that have adopted ISSB Standards into regulation
• Companies that report under IFRS Accounting Standards
• Companies responding to investor or lender requests for sustainability-related financial information aligned with a recognised global standard

Even where IFRS S1 is not yet mandatory, many companies are voluntarily aligning their sustainability disclosures with the standard to meet investor expectations and prepare for future regulatory requirements.

What does IFRS S1 mean for carbon accounting?

IFRS S1 does not prescribe a specific methodology for measuring carbon emissions, but it does require companies to disclose the metrics they use and to apply them consistently. For companies that have not yet established a rigorous carbon accounting process, IFRS S1 creates a clear incentive to do so.

Accurate, full-scope carbon data (covering Scopes 1, 2, and 3 in line with the GHG Protocol) is the foundation on which companies build credible IFRS S1 disclosures. Without it, companies cannot meaningfully disclose the financial effects of climate-related risks, set credible targets, or demonstrate progress over time.

This is where tools like Seedling become relevant. Companies that need to produce GHG Protocol-aligned carbon data, with clear methodology documentation and year-on-year consistency, are better positioned to meet the disclosure quality that IFRS S1 expects, without building an internal sustainability function from scratch.

The direction of travel is clear: sustainability disclosures are converging with financial reporting standards. Companies that invest in high-quality carbon data now are building the foundation for credible IFRS S1 compliance as adoption spreads across jurisdictions.