Let’s Build the Future Together
Thanks for joining us in taking a step toward a net-zero future. We make it easier for organizations to get the information they need, the guidance they want, and the support they deserve to navigate the complicated and evolving world of carbon reduction. We'll be in touch with ways your company can be CarbonBetter, too.
Here's the Full Fierce Whiskers Case Study
We welcome your questions and feedback! Reach out anytime at hello@carbonbetter.com.

The IFRS S1 & S2 Standards Align with TCFD’s Recommendations

IFRS S1 + S2


Published on



Published on


New US Climate Regulations—Are You Ready?

By many accounts, 2023 is expected to be a transformative year in the evolution of climate-related disclosure and mitigation requirements in the United States. In this webinar, we cut through the jargon to provide clarity about what climate-related requirements may be coming for US companies by unpacking the two proposed federal rules that are currently pending and one EU regulation that affects some US companies.

Companies following the TCFD’s climate-related recommendations will inherently meet the requirements of IFRS S1 + S2.

By Nicole Sullivan

In June 2023, the International Sustainability Standards Board (ISSB) announced the release of its groundbreaking standards, the International Financial Reporting Standards (IFRS), IFRS S1 and IFRS S2, marking a significant advancement in sustainability-related disclosures in global capital markets. These standards were designed to enhance trust and assurance in corporate sustainability disclosures, influencing investment decisions. For the first time, these standards introduce a unified language for companies to disclose the impact of climate-related risks and opportunities on their future prospects. ISSB Chair Emmanuel Faber spearheaded the official launch of the standards at the IFRS Foundation’s annual conference. In addition, stock exchanges worldwide, from cities like Frankfurt to Santiago de Chile, hosted a series of events to celebrate this milestone.

About the Standards

IFRS S1 focuses on the disclosure of sustainability-related risks and opportunities that are relevant to investors as they make decisions about allocating resources to companies over the short, medium, and long term. While IFRS S1 aligns with the views of the US Securities and Exchange Commission (SEC), it does have notable differences from the European Sustainability Reporting Standards (ESRS). Notably, ESRS integrates the concept of double materiality and has a broader scope compared to the US’s emphasis on information material to investor decisions. The definition of “material” in IFRS S1 is aligned with that used in IFRS Accounting Standards, where information is considered material if its omission, misstatement, or obscurity could reasonably influence the decisions of primary users of general-purpose financial reports. Sustainability-related financial disclosures are required to align with financial statements in terms of timing and be included in the same reporting package. However, S1 doesn’t require a specific disclosure format or location, allowing for potential inclusion in multiple reports. To address the potential challenges companies may face—such as undue cost or effort—when applying requirements that involve a high level of judgment or uncertainty, including identifying sustainability‑related risks and opportunities, the ISSB allows companies to rely on “reasonable and supportable information that is available to the entity” at the reporting date.


IFRS S2 details specific climate-related disclosures and is intended to be used in tandem with IFRS S1. Both standards fully integrate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The required disclosures pertain to material information regarding climate-related risks and opportunities that may impact a company’s value chain and influence its performance. Absolute Scope 1, 2, and 3 emissions disclosures are required in S2 along with how and why specific inputs, assumptions, and estimation techniques were used.

Alignment with TCFD Recommendations

In July 2023, after the Financial Stability Board (FSB) announced the conclusion of the Task Force on Climate-related Financial Disclosures (TCFD)’s work, the IFRS Foundation published a comparison of the requirements in IFRS S2 Climate-related Disclosures with the TCFD recommendations. The IFRS S2 requirements align with the four core TCFD recommendations and its eleven recommended disclosures. Companies that adhere to the ISSB Standards will inherently meet the TCFD recommendations, eliminating the need to apply both separately. IFRS S2 also introduces additional requirements, such as industry-based metrics, disclosure on the use of carbon credits for net emissions targets, and further details on financed emissions.

“The global economy needs common reporting standards to reduce fragmentation and drive comparability in climate-related financial data. Built upon the foundation of the TCFD framework, the ISSB Standards provide a global baseline for companies to disclose decision-useful, climate-related financial information—information that is critical for creating more transparent markets, helping achieve a smooth low-carbon transition, and building a more resilient and sustainable global economy.”

Mary Schapiro, Head of the TCFD & Vice Chair for Global Public Policy at Bloomberg L.P.

Fierce Whiskers Case Study Cover
FW Sustainability Report

Learn more about how Fierce Whiskers has made sustainable choices every step of the way by downloading its full sustainability report.

A Global Standard

The development of IFRS S1 S2 was influenced by comprehensive market feedback and was a response to calls from global entities such as the G20, the FSB, and the International Organization of Securities Commissions (IOSCO). The widespread demand for a consistent understanding of how sustainability factors impact companies' prospects is evident through the support for these standards.

The ISSB Standards ensure that companies present sustainability-related information alongside financial statements. They are also grounded in the principles that form the basis of the IFRS Accounting Standards, which are mandated by over 140 jurisdictions. These standards are apt for global application, which could enable a genuine global baseline.

Adoption and Implementation

With the issuance of IFRS S1 and S2, the ISSB is gearing up to collaborate with jurisdictions and corporations to facilitate adoption. Initial steps include the formation of a Transition Implementation Group to assist companies in applying the standards and initiating capacity-building measures to ensure effective implementation.

Emmanuel Faber, ISSB Chair, highlighted the culmination of over 18 months of rigorous work to produce the first set of sustainability disclosure standards for global capital markets. He emphasized the importance of these standards in aiding companies to present their sustainability narratives in a robust, comparable, and verifiable manner.


The introduction of these standards is a significant stride towards establishing a global standard for sustainability reporting. It ensures that investors and stakeholders have access to consistent and comparable sustainability information, paired with financial data, enabling them to understand a company’s performance and commitment to sustainable value creation. Whether you need help navigating the ISSB or other standards, we can help. Contact us today today to get started.

What is the primary goal of the ISSB in introducing the IFRS S1 and S2 standards?

The primary goal of the ISSB in introducing these standards is to provide a unified framework for companies to disclose sustainability-related risks and opportunities, ensuring transparency and consistency in global capital markets.

How do the IFRS S1 and S2 standards differ from other existing sustainability reporting standards?

The IFRS S1 and S2 standards are unique in their comprehensive approach to sustainability disclosures, emphasizing both climate-related risks and broader sustainability metrics. They also offer flexibility in disclosure format and location.

How will these standards impact investment decisions in the global market?

With more transparent and consistent sustainability disclosures, investors will have a clearer understanding of a company's sustainability practices and risks, potentially influencing investment decisions and strategies.

From the Stories

How We Are Celebrating Earth Day 2024

How We Are Celebrating Earth Day 2024

How we are celebrating Earth Day 2024, as well as a recap of our Earth Day impacts for 2022 and 2023.

New SEC Climate Disclosure Rules: Navigating Opportunities and Legal Boundaries

New SEC Climate Disclosure Rules: Navigating Opportunities and Legal Boundaries

The SEC's new climate disclosure rules, effective in 2026, mandate transparency in material climate risks without requiring Scope 3 emissions reporting.

Addressing Hidden Emissions: Key Takeaways From Our SXSW 2024 Panel

Addressing Hidden Emissions: Key Takeaways From Our SXSW 2024 Panel

Our SXSW 2024 panel featured experts from Whole Foods Market, Asana, and Fierce Whiskers, focusing on strategies for reducing hidden emissions, particularly Scope 3, through collaboration and comprehensive approaches.