The IFRS Foundation announced the publication of a new guide, aimed at supporting companies beginning to apply the ISSB standards for sustainability reporting with their initial disclosures focused only on climate-related information.

The IFRS Foundation’s International Sustainability Standards Board (ISSB) was launched in November 2021, with the goal to develop IFRS Sustainability Disclosure Standards to provide investors with information about companies’ sustainability risks and opportunities. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023.

While developing the standards, the ISSB also introduced “reliefs,” enabling companies applying the standards to temporarily focus only on certain key areas or pieces of information, given concerns around data availability and preparedness. One of the key reliefs provided by the ISSB was the “climate-first” transition relief – the focus of the new guide – which allowed companies to begin IFRS S1 reporting by disclosing only on climate-related information, with future sustainability topics to follow in subsequent years.

When introducing the climate-first relief, the ISSB explained that “investors have indicated that while they need consistent, comprehensive sustainability-related information across all risks and opportunities to inform their investment decision-making, the need for disclosures about climate-related risks and opportunities is the most urgent.”

Key topics covered in the new guidance include definitions and explanations of materiality considerations to be taken in preparing sustainability reports, factors to consider in disclosing climate-related risks and opportunities, requirements around metrics and targets to be applied, disclosures on sources of guidance companies may consider in identifying climate-related risks and opportunities, disclosures abut judgements made in preparing climate-related disclosures, in addition to technical factors such as location of disclosures within company reporting and timing of reporting, among others.

In its statement announcing the release of the new guidance, the IFRS Foundation said:

“The publication of this guide is part of the ISSB’s commitment to supporting the implementation of ISSB Standards, helping companies to prepare information and helping investors to receive decision-useful information.”

Click here to access the new guide, “Applying IFRS S1 when reporting only climate-related disclosures in accordance with IFRS S2.”