ESG Emerging Regulations & Standards


T3 helps you navigate the intricacies of IFRS S1 and S2 standards, ensuring your disclosures are aligned with the latest international sustainability reporting requirements, enhancing the consistency and comparability of your sustainability performance.


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Overview of Topic

On 26 June 2023 the International Sustainability Standards Board (ISSB) released its first two International Sustainability Disclosure Standards (IFRS SDS or the Standards) that become effective for periods beginning on or after 1 January 2024.  The IFRS S1 and S2 standards, effective from January 2024, will create a global baseline for sustainability reporting. T3’s services are essential in aligning with these standards, impacting thousands of entities worldwide, as these new standards require detailed disclosures on sustainability-related financial information and climate risks. With the global sustainable investment market growing rapidly, reaching $30.7 trillion in assets in 2020 as reported by the Global Sustainable Investment Alliance, compliance with these standards is not just regulatory but strategic.

T3 can help you with your IFRS S1 and IFRS S2 requirements:

IFRS S1: General Requirements for Disclosure of Sustainability-Related Financial Information

  • Scope: Applies to all entities, whether they follow IFRS or another GAAP, outlining a full set of sustainability-related disclosures.
  • Objective: To integrate sustainability-related risks and opportunities into general-purpose financial reporting, providing information to aid decisions on resource allocation, potentially affecting cash flow, finance access, or cost of capital.
  • Content & Materiality: Requires relevant, clearly represented, comparable, and timely disclosures, focusing on qualitative and quantitative aspects of governance, strategy, risk management, and sustainability metrics and targets.

IFRS S2: Climate-related Disclosures

  • Scope: Specifies reporting on climate-related risks and opportunities, excluding risks not expected to impact an entity’s future prospects.
  • Objective: To provide decision-useful information on how climate-related issues might affect cash flows or financial standing.
  • Content: Expands on TCFD’s framework, requiring disclosures under governance, strategy, risk management, and metrics, including detailed Scope 1, 2, and 3 GHG emissions data.
  • Industry-Specific & Transitional Provisions: Encourages the use of ISSB standards (like IFRS S2 for climate) and SASB standards, where ISSB ones are not yet available, with transitional reliefs for first-time application, including exemptions on comparative data and certain emissions reporting requirements.

These standards aim to enhance the consistency and comparability of sustainability reporting, addressing the need for high-quality information that reflects an entity’s sustainability performance and the impact of climate change on its operations.

Significance in Today's Landscape

Sustainability reporting is not just a trend; it’s a stakeholder expectation and increasingly a regulatory requirement. The ISSB consolidates the efforts of the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF), integrating established frameworks like the SASB Standards. This integration of standards is crucial as it addresses the quality gap in sustainability information, offering stakeholders globally comparable data and combating ‘greenwashing’. In the wake of global support for these standards and the pressing need for transparency, the ISSB’s work is game-changing. Backed by the G7, G20, and other international bodies, the standards set by ISSB will be instrumental in providing stakeholders the clarity needed to make informed decisions, eliminating ambiguity around corporate sustainability practices.

The financial repercussions of failing to comply with regulatory standards can be profound and multifaceted, posing significant risks to businesses. Firstly, non-compliance may lead to a dwindling customer base and restricted market access as clients increasingly favor companies with compliant, sustainable practices. Secondly, it can result in disqualification from procurement processes, as many organizations mandate compliance for eligibility. Thirdly, access to essential financial resources could be hindered, with banks and investors often favoring entities that adhere to regulatory expectations. Fourthly, operational expenses may surge due to the imposition of carbon taxes and the costs associated with operational inefficiencies. Finally, businesses may face substantial regulatory penalties and suffer severe reputational damage, which can have long-lasting negative effects on their brand value and stakeholder trust.


IFRS S1 & IFRS S2 impact a wide range of firms, particularly those with public accountability or those that choose to adopt these standards (Publicly Accountable Firms, Large Multinational Corporations, Firms Operating in IFRS-Adopting Jurisdictions (over 140 jurisdictions use IFRS), Companies Seeking Cross-Border Investments or Listings, Subsidiaries of IFRS-Compliant Parent Companies, and Sustainability-Conscious Firms)

Asset Managers
Commodity Houses

How Can We Help?

T3 stands ready to equip your company with the knowledge and tools to comply with and excel in sustainability reporting. From familiarizing with IFRS S1 and S2 Standards to creating a sustainability roadmap and ensuring high-quality data for disclosures, T3’s services are comprehensive. We’ll help you understand your current position, identify gaps, and support you in creating a robust governance structure aligned with your sustainability strategy.



Readiness Assessment

Initial Briefing: T3 provides a comprehensive introduction to the ISSB standards, ensuring your team understands the expectations and timelines.

Current Systems Review: We evaluate your existing governance structures, sustainability strategies, and reporting mechanisms against the ISSB benchmarks.


Gap Analysis

Identifying Discrepancies: Through meticulous analysis, T3 pinpoints specific areas where your current reporting falls short of ISSB standards.
Strategic Recommendations: We provide actionable insights and recommendations to bridge these gaps effectively.


Sustainability Roadmap Development

Customized Planning: T3 helps you construct a tailored sustainability roadmap, detailing key milestones and deliverables.
Resource Allocation: We assist in identifying and allocating the internal and external resources needed for compliance.


Data Management Enhancement

Data Quality Improvement: T3 aids in establishing or refining data collection, control processes, and analysis methods to ensure the integrity of your sustainability data.
Disclosure Complementing: We ensure that the data not only complements your disclosures but also is robust enough to withstand the scrutiny of assurance processes.


Standards Familiarization

Educational Workshops: T3 conducts workshops to educate your team on the nuances of IFRS S1 and S2, including industry-specific standards where applicable.
Reporting Practices Update: We guide you through updating your reporting practices to align with the new standards, including addressing the nuances that differ from frameworks like TCFD.


Organizational Training

Stakeholder Engagement: T3 works to ensure that all levels of your business grasp the importance of sustainability, fostering an organizational culture that prioritizes these efforts.
Leadership Buy-In: We engage with top management to secure their commitment, which is crucial for the successful adoption of sustainability strategies.


Reporting Timeline and Synchronization

Reporting Schedule: T3 assists in creating a schedule to align the timing of your sustainability report with your financial statements, easing the year-end reporting burden.
Transitional Support: We offer guidance on the transitional provisions for first-time application of the standards to make the process as seamless as possible.

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