This article discusses the progress of corporate sustainable development and corporate sustainability standards, with a particular focus on the core content and impact of the International Financial Reporting Standards (IFRS) S1. Corporate sustainability has become a key issue in business operations, especially with the rise of the Environmental, Social, and Governance (ESG) concept, which requires companies to enhance their performance in in these areas. Consequently, various sustainability-related regulations have emerged globally. These regulations cite international sustainability standards and frameworks such as GRI Standards, TCFD, SASB, and others, as guidelines for their disclosure requirements.
IFRS S1 & S2 are emerging sustainability disclosure standards that officially took effect on January 1, 2024. The core content of these disclosure standards includes governance, strategy, risk management, and indicators and targets as the four major dimensions. The article further analyzes the disclosure requirements for each dimension, emphasizing that IFRS S1 is more rigorous than existing frameworks, requiring companies to disclose governance structures, sustainability strategies, risk management, and goals more specifically.
For companies, IFRS S1 brings about three major impacts: mandatory disclosure of the connection between sustainability and financial information, enhancement of the quality of sustainability information, and quantification of sustainability risk impacts. The article suggests that companies should start disclosing and integrating ESG information early, including adopting climate-related financial disclosures, establishing ESG management mechanisms, and executing and disclosing greenhouse gas reduction information. Companies can also continuously review and enhance their sustainability capabilities by participating in international sustainability surveys and initiatives such as CDP, SBTi, etc., to adapt to changes in regulations and standards and create sustainable competitiveness.
For instance, in the governance aspect of IFRS S1, companies need to disclose the supervision and management of sustainability issues by the board and senior management, as well as whether the governance unit possesses relevant skills and expertise. A company can specifically outline the frequency and content of sustainability courses attended by board members to demonstrate the company’s support of sustainability.
In the strategy aspect of IFRS S1, companies need to disclose the expected impact of sustainability risks and opportunities on the business, along with corresponding response strategies. For example, a manufacturing company can set carbon reduction goals and disclose the specific content of its carbon reduction plan to address potential carbon fees and taxes.
These examples illustrate how companies, when disclosing sustainability information, can translate the requirements of IFRS S1 into practical actions and concrete stories to enhance transparency and understanding.
The core content of these disclosure standards includes governance, strategy, risk management, and indicators and targets as the four major dimensions.
Despite the close proximity of those two “ands,” there is nothing ungrammatical about this. However, if in your writing you feel readers may be confused, separate the “ands” a little by moving the pair of sub-items to the start of the list like this:
The core content of these disclosure standards includes indicators and targets, governance, strategy, and risk management as the four major dimensions.
