IFRS foundation offers clarity on ‘climate-first’ reporting under ISSB standards
Recent guidance published by the IFRS Foundation seeks to help companies navigating climate-first reporting under the International Sustainability Standards Board (ISSB) Standards. Titled Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2, the guide aims to clarify how companies can report only climate-related risks and opportunities while still complying with IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.
This move is a pragmatic response to investor calls for urgent climate data and corporate — and auditor — concerns about data gaps and reporting burdens. To smooth the transition, ISSB introduced a ‘climate-first’ relief, allowing companies in their first year of ISSB reporting to focus solely on IFRS S2 Climate-related Disclosures, applying IFRS S1 only where relevant.
The guidance underscores that companies using the transition relief must still adhere to IFRS S1’s core principles, including materiality, fair presentation, and qualitative characteristics of useful information. The ISSB hopes this will encourage both regulators looking to implement climate-first reporting and companies voluntarily stepping up their climate disclosures.
The ISSB seems to be balancing ambition with reality—delivering the climate data investors demand today, while giving companies room to gear up to more comprehensive reporting tomorrow.
For full details, access the IFRS Foundation’s guidance here.
