IFRS S1: Definition

The primary objective of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information is to mandate entities to provide information concerning their sustainability-related risks and opportunities. This information should be valuable to the primary users of general-purpose financial reports when making decisions related to allocating resources to the entity.IFRS S1 establishes fundamental criteria for the content and presentation of sustainability-related information, particularly when adhering to IFRS sustainability disclosure standards. These provisions aim to assist primary users in making financial decisions that pertain to the entity. It’s worth noting that IFRS S1 can also be applied when financial statements are prepared in accordance with generally accepted accounting principles (GAAP).Countries such as Australia have developed their Mandatory Climate Reporting legislation through IFRS guidance and companies have to disclose in line with AASB S2 and ASSB S1 .The essential components of this Standard include:Conceptual Foundation: The effectiveness of sustainability-related financial information is enhanced when it possesses qualities such as comparability, verifiability, timeliness, and understandability. These attributes are fundamental characteristics of quantitative information.Core Content: This comprises four key elements—governance, strategy, risk management, and metrics and targets.While identifying sustainability-related risks and opportunities that could impact the entity’s prospects, report preparers are obligated to consider both IFRS sustainability-related disclosure standards and the disclosure topics outlined in the Sustainability Accounting Standards Board (SASB) standards, which are categorised by industry. In cases involving water and biodiversity matters, the CDSB Framework Application Guidance may also be applicable. Additionally, organisations may utilise standards from other standard-setting bodies (such as GRI) and industry-standard guidance. It is crucial that all sources of guidance are disclosed and clearly identified.