IFRS sustainability disclosures: the impact of IFRS S1 and S2 on corporate reporting

Abstract

This paper explores the introduction of IFRS S1 and IFRS S2 by the International Sustainability Standards Board (ISSB) and their implications for corporate sustainability reporting worldwide. These standards, released in June 2023 under the oversight of the IFRS Foundation, aim to enhance consistency, comparability, and reliability in sustainability disclosures. IFRS S1 sets general requirements for reporting sustainability-related risks and opportunities, while IFRS S2 focuses specifically on climate-related disclosures. Through a literature-based analysis, this paper examines how these standards are transforming the landscape of corporate reporting, the challenges faced during implementation, and their potential to harmonize global sustainability practices. The findings indicate that IFRS S1 and S2 mark a significant milestone toward integrating financial and non-financial information, yet widespread adoption depends on regulatory support, data quality, and organizational readiness.