ISSB Standards: IFRS S1, IFRS S2

Vladimir Skobarev, FBK Partner, and Elena Pertseva, Associate Director of the Corporate Governance and Sustainability Services Department, have hosted a training dedicated to ISSB Standards IFRS S1 and IFRS S2.

These two sustainability standards were issued last June.

IFRS S1 outlines general requirements for disclosure of sustainability-related financial information. It requires an entity to disclose information about its sustainability-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity.

The objective of IFRS S2 is to require an entity to disclose information about its climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects, and information that is useful to users of financial reports in making decisions relating to providing resources to the entity.

The above standards are effective for annual reporting periods beginning on or after 1 January 2024.  It is up to individual jurisdictions to decide whether and when they are mandatory.  Some countries have already decided on their introduction.

As part of the training, the experts discussed the role of ISSB standards in the development of the corporate reporting system, the structure of ISSB standards, their main requirements, as well as the prospects for their implementation in Russia and in other countries.

“Despite the fact that, by our estimates, the application of ISSB standards in Russia will be voluntary in the coming years, we recommend companies to analyse their sustainability reporting systems for the need to adapt them to the requirements of these standards. Transition to the ISSB standards will be easier for the companies that have experience in disclosure under the TCFD Recommendations and SASB standards,” Vladimir Skobarev said.