issb-2023-a-ifrs-s1-general-requirements-for-disclosure-of-sustainability-related-financial-information

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

Category: Part A—IFRS Sustainability Disclosure Standards

Source: IFRS Foundation (https://www.ifrs.org)

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PDF: https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards-issb/english/2023/issued/part-a/issb-2023-a-ifrs-s1-general-requirements-for-disclosure-of-sustainability-related-financial-information.pdf?bypass=on

Year: 2023

Type: Standard

General Requirements for Disclosure of

Sustainability-related Financial Information

June 2023

IFRS S1

IFRS

® Sustainability Disclosure Standard

International Sustainability Standards Board

IFRS S1

General Requirements for Disclosure of

Sustainability-related Financial

Information

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information together with its

accompanying documents is issued by the International Sustainability Standards Board (ISSB).

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CONTENTS

from paragraph

IFRS SUSTAINABILITY DISCLOSURE STANDARD

S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF

SUSTAINABILITY-RELATED FINANCIAL INFORMATION

OBJECTIVE

SCOPE

CONCEPTUAL FOUNDATIONS

Fair presentation

Materiality

Reporting entity

Connected information

CORE CONTENT

Governance

Strategy

Risk management

Metrics and targets

GENERAL REQUIREMENTS

Sources of guidance

Location of disclosures

Timing of reporting

Comparative information

Statement of compliance

JUDGEMENTS, UNCERTAINTIES AND ERRORS

Judgements

Measurement uncertainty

Errors

APPENDICES

A Defined terms

B Application guidance

C Sources of guidance

D Qualitative characteristics of useful sustainability-related

financial information

E Effective date and transition

APPROVAL BY THE ISSB OF IFRS S1 ISSUED IN JUNE 2023

FOR THE ACCOMPANYING GUIDANCE LISTED BELOW, SEE PART B OF THIS EDITION

ILLUSTRATIVE GUIDANCE

ILLUSTRATIVE EXAMPLES

continued...

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

...continued

FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION

BASIS FOR CONCLUSIONS

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial

Information is set out in paragraphs 1–86 and Appendices A–E. All paragraphs have equal

authority. Paragraphs in bold type state the main principles. Terms defined in Appendix A

are in italics the first time they appear in the Standard. Definitions of other terms are given

in other IFRS Sustainability Disclosure Standards. The Standard should be read in the

context of its objective and the Basis for Conclusions.

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

IFRS S1 General Requirements for Disclosure of

Sustainability-related Financial Information

Objective

The objective of IFRS S1 General Requirements for Disclosure of Sustainability-

related Financial Information is to require an entity to disclose information

about its sustainability-related risks and opportunities that is useful to

primary users of general purpose financial reports in making decisions relating

to providing resources to the entity.1

Information about sustainability-related risks and opportunities is useful to

primary users because an entity’s ability to generate cash flows over the short,

medium and long term is inextricably linked to the interactions between the

entity and its stakeholders, society, the economy and the natural environment

throughout the entity’s value chain. Together, the entity and the resources and

relationships throughout its value chain form an interdependent system in

which the entity operates. The entity’s dependencies on those resources and

relationships and its impacts on those resources and relationships give rise to

sustainability-related risks and opportunities for the entity.

This Standard requires an entity to disclose information about all

sustainability-related risks and opportunities that could reasonably be

expected to affect the entity’s cash flows, its access to finance or cost of

capital over the short, medium or long term. For the purposes of this

Standard, these risks and opportunities are collectively referred to as

‘sustainability-related risks and opportunities that could reasonably be

expected to affect the entity’s prospects’.

This Standard also prescribes how an entity prepares and reports its

sustainability-related financial disclosures. It sets out general requirements for the

content and presentation of those disclosures so that the information

disclosed is useful to primary users in making decisions relating to providing

resources to the entity.

Scope

An entity shall apply this Standard in preparing and reporting

sustainability-related financial disclosures in accordance with IFRS

Sustainability Disclosure Standards.

Sustainability-related risks and opportunities that could not reasonably be

expected to affect an entity’s prospects are outside the scope of this Standard.

Other IFRS Sustainability Disclosure Standards specify information an entity is

required

disclose

about

specific

sustainability-related

risks

and

opportunities.

Throughout this Standard, the terms ‘primary users’ and ‘users’ are used interchangeably, with

the same meaning.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

An entity may apply IFRS Sustainability Disclosure Standards irrespective

of whether the entity’s related general purpose financial statements

(referred to as ‘financial statements’) are prepared in accordance with IFRS

Accounting Standards or other generally accepted accounting principles or

practices (GAAP).

This Standard uses terminology suitable for profit-oriented entities, including

public-sector business entities. If entities with not-for-profit activities in the

private sector or the public sector apply this Standard, they might need to

amend the descriptions used for particular items of information when

applying IFRS Sustainability Disclosure Standards.

Conceptual foundations

For sustainability-related financial information to be useful, it must be

relevant and faithfully represent what it purports to represent. These are

fundamental qualitative characteristics of useful sustainability-related

financial information. The usefulness of sustainability-related financial

information is enhanced if the information is comparable, verifiable,

timely and understandable. These are enhancing qualitative characteristics

of useful sustainability-related financial information (see Appendix D).

Fair presentation

A complete set of sustainability-related financial disclosures shall present

fairly all sustainability-related risks and opportunities that could

reasonably be expected to affect an entity’s prospects.

To identify sustainability-related risks and opportunities that could reasonably

be expected to affect an entity’s prospects, an entity shall apply paragraphs

B1–B12.

Fair presentation requires disclosure of relevant information about

sustainability-related risks and opportunities that could reasonably be

expected to affect the entity’s prospects, and their faithful representation

in accordance with the principles set out in this Standard. To achieve

faithful representation, an entity shall provide a complete, neutral and

accurate depiction of those sustainability-related risks and opportunities.

Materiality is an entity-specific aspect of relevance based on the nature or

magnitude, or both, of the items to which the information relates, in the

context of the entity’s sustainability-related financial disclosures.

Fair presentation also requires an entity:

(a)

to disclose information that is comparable, verifiable, timely and

understandable; and

(b)

to disclose additional information if compliance with the specifically

applicable requirements in IFRS Sustainability Disclosure Standards is

insufficient to enable users of general purpose financial reports to

understand the effects of sustainability-related risks and opportunities

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

on the entity’s cash flows, its access to finance and cost of capital over

the short, medium and long term.

Applying

IFRS

Sustainability

Disclosure

Standards,

with

additional

information disclosed when necessary (see paragraph 15(b)), is presumed to

result in sustainability-related financial disclosures that achieve fair

presentation.

Materiality

An entity shall disclose material information about the sustainability-related

risks and opportunities that could reasonably be expected to affect the

entity’s prospects.

In the context of sustainability-related financial disclosures, information is

material if omitting, misstating or obscuring that information could

reasonably be expected to influence decisions that primary users of general

purpose financial reports make on the basis of those reports, which

include financial statements and sustainability-related financial disclosures

and which provide information about a specific reporting entity.

To identify and disclose material information, an entity shall apply paragraphs

B13–B37.

Reporting entity

An entity’s sustainability-related financial disclosures shall be for the same

reporting entity as the related financial statements (see paragraph B38).

Connected information

An entity shall provide information in a manner that enables users of

general purpose financial reports to understand the following types of

connections:

(a)

the connections between the items to which the information relates

—such as connections between various sustainability-related risks

and opportunities that could reasonably be expected to affect the

entity’s prospects; and

(b)

the connections between disclosures provided by the entity:

(i)

within its sustainability-related financial disclosures—such

as connections between disclosures on governance, strategy,

risk management and metrics and targets; and

(ii)

across its sustainability-related financial disclosures and

other general purpose financial reports published by the entity

—such as its related financial statements (see paragraphs

B39–B44).

An entity shall identify the financial statements to which the sustainability-

related financial disclosures relate.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

Data and assumptions used in preparing the sustainability-related financial

disclosures shall be consistent—to the extent possible considering the

requirements of IFRS Accounting Standards or other applicable GAAP—

with the corresponding data and assumptions used in preparing the

related financial statements (see paragraph B42).

When currency is specified as the unit of measure in the sustainability-

related financial disclosures, the entity shall use the presentation currency

of its related financial statements.

Core content

Unless another IFRS Sustainability Disclosure Standard permits or requires

otherwise in specified circumstances, an entity shall provide disclosures

about:

(a)

governance—the governance processes, controls and procedures the

entity uses to monitor and manage sustainability-related risks and

opportunities (see paragraphs 26–27);

(b)

strategy—the approach the entity uses to manage sustainability-

related risks and opportunities (see paragraphs 28–42);

(c)

risk management—the processes the entity uses to identify, assess,

prioritise and monitor sustainability-related risks and opportunities

(see paragraphs 43–44); and

(d)

metrics and targets—the entity’s performance in relation to

sustainability-related risks and opportunities, including progress

towards any targets the entity has set or is required to meet by law

or regulation (see paragraphs 45–53).

Governance

The objective of sustainability-related financial disclosures on governance

is to enable users of general purpose financial reports to understand the

governance processes, controls and procedures an entity uses to monitor,

manage and oversee sustainability-related risks and opportunities.

To achieve this objective, an entity shall disclose information about:

(a)

the governance body(s) (which can include a board, committee or

equivalent body charged with governance) or individual(s) responsible

for oversight of sustainability-related risks and opportunities.

Specifically, the entity shall identify that body(s) or individual(s) and

disclose information about:

(i)

how

responsibilities

for

sustainability-related

risks

and

opportunities are reflected in the terms of reference, mandates,

role descriptions and other related policies applicable to that

body(s) or individual(s);

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

(ii)

how

the

body(s)

individual(s)

determines

whether

appropriate skills and competencies are available or will be

developed to oversee strategies designed to respond to

sustainability-related risks and opportunities;

(iii)

how and how often the body(s) or individual(s) is informed

about sustainability-related risks and opportunities;

(iv)

how

the

body(s)

individual(s)

takes

into

account

sustainability-related risks and opportunities when overseeing

the entity’s strategy, its decisions on major transactions and its

risk management processes and related policies, including

whether the body(s) or individual(s) has considered trade-offs

associated with those risks and opportunities; and

(v)

how the body(s) or individual(s) oversees the setting of targets

related to sustainability-related risks and opportunities, and

monitors progress towards those targets (see paragraph 51),

including whether and how related performance metrics are

included in remuneration policies.

(b)

management’s role in the governance processes, controls and

procedures used to monitor, manage and oversee sustainability-related

risks and opportunities, including information about:

(i)

whether the role is delegated to a specific management-level

position or management-level committee and how oversight is

exercised over that position or committee; and

(ii)

whether management uses controls and procedures to support

the oversight of sustainability-related risks and opportunities

and, if so, how these controls and procedures are integrated

with other internal functions.

Strategy

The objective of sustainability-related financial disclosures on strategy is to

enable users of general purpose financial reports to understand an entity’s

strategy for managing sustainability-related risks and opportunities.

Specifically, an entity shall disclose information to enable users of general

purpose financial reports to understand:

(a)

the sustainability-related risks and opportunities that could reasonably

be expected to affect the entity’s prospects (see paragraphs 30–31);

(b)

the current and anticipated effects of those sustainability-related risks

and opportunities on the entity’s business model and value chain (see

paragraph 32);

(c)

the effects of those sustainability-related risks and opportunities on

the entity’s strategy and decision-making (see paragraph 33);

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

(d)

the effects of those sustainability-related risks and opportunities on

the entity’s financial position, financial performance and cash flows

for the reporting period, and their anticipated effects on the entity’s

financial position, financial performance and cash flows over the

short, medium and long term, taking into consideration how those

sustainability-related risks and opportunities have been factored into

the entityʼs financial planning (see paragraphs 34–40); and

(e)

the resilience of the entity’s strategy and its business model to those

sustainability-related risks (see paragraphs 41–42).

Sustainability-related risks and opportunities

An entity shall disclose information that enables users of general purpose

financial reports to understand the sustainability-related risks and

opportunities that could reasonably be expected to affect the entity’s

prospects. Specifically, the entity shall:

(a)

describe sustainability-related risks and opportunities that could

reasonably be expected to affect the entity’s prospects;

(b)

specify the time horizons—short, medium or long term—over which

the effects of each of those sustainability-related risks and

opportunities could reasonably be expected to occur; and

(c)

explain how the entity defines ‘short term’, ‘medium term’ and ‘long

term’ and how these definitions are linked to the planning horizons

used by the entity for strategic decision-making.

Short-, medium- and long- term time horizons can vary between entities and

depend on many factors, including industry-specific characteristics, such as

cash flow, investment and business cycles, the planning horizons typically

used in an entity’s industry for strategic decision-making and capital

allocation plans, and the time horizons over which users of general purpose

financial reports conduct their assessments of entities in that industry.

Business model and value chain

An entity shall disclose information that enables users of general purpose

financial reports to understand the current and anticipated effects of

sustainability-related risks and opportunities on the entity’s business model

and value chain. Specifically, the entity shall disclose:

(a)

a description of the current and anticipated effects of sustainability-

related risks and opportunities on the entity’s business model and

value chain; and

(b)

a description of where in the entity’s business model and value chain

sustainability-related risks and opportunities are concentrated (for

example, geographical areas, facilities and types of assets).

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

Strategy and decision-making

An entity shall disclose information that enables users of general purpose

financial reports to understand the effects of sustainability-related risks and

opportunities on its strategy and decision-making. Specifically, the entity shall

disclose information about:

(a)

how the entity has responded to, and plans to respond to,

sustainability-related risks and opportunities in its strategy and

decision-making;

(b)

the progress against plans the entity has disclosed in previous

reporting periods, including quantitative and qualitative information;

and

(c)

trade-offs between sustainability-related risks and opportunities that

the entity considered (for example, in making a decision on the

location of new operations, an entity might have considered the

environmental impacts of those operations and the employment

opportunities they would create in a community).

Financial position, financial performance and cash flows

An entity shall disclose information that enables users of general purpose

financial reports to understand:

(a)

the effects of sustainability-related risks and opportunities on the

entity’s financial position, financial performance and cash flows for

the reporting period (current financial effects); and

(b)

the anticipated effects of sustainability-related risks and opportunities

on the entity’s financial position, financial performance and cash flows

over the short, medium and long term, taking into consideration how

sustainability-related risks and opportunities are included in the

entity’s financial planning (anticipated financial effects).

Specifically, an entity shall disclose quantitative and qualitative information

about:

(a)

how sustainability-related risks and opportunities have affected its

financial position, financial performance and cash flows for the

reporting period;

(b)

the sustainability-related risks and opportunities identified in

paragraph 35(a) for which there is a significant risk of a material

adjustment within the next annual reporting period to the carrying

amounts of assets and liabilities reported in the related financial

statements;

(c)

how the entity expects its financial position to change over the short,

medium and long term, given its strategy to manage sustainability-

related risks and opportunities, taking into consideration:

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

(i)

its investment and disposal plans (for example, plans for capital

expenditure,

major

acquisitions

and

divestments,

joint

ventures, business transformation, innovation, new business

areas, and asset retirements), including plans the entity is not

contractually committed to; and

(ii)

its planned sources of funding to implement its strategy; and

(d)

how the entity expects its financial performance and cash flows to

change over the short, medium and long term, given its strategy to

manage sustainability-related risks and opportunities.

In providing quantitative information, an entity may disclose a single amount

or a range.

In preparing disclosures about the anticipated financial effects of a

sustainability-related risk or opportunity, an entity shall:

(a)

use all reasonable and supportable information that is available to the

entity at the reporting date without undue cost or effort (see

paragraphs B8–B10); and

(b)

use an approach that is commensurate with the skills, capabilities and

resources that are available to the entity for preparing those

disclosures.

An entity need not provide quantitative information about the current or

anticipated financial effects of a sustainability-related risk or opportunity if

the entity determines that:

(a)

those effects are not separately identifiable; or

(b)

the level of measurement uncertainty involved in estimating those

effects is so high that the resulting quantitative information would not

be useful (see paragraphs 77–82).

In addition, an entity need not provide quantitative information about the

anticipated financial effects of a sustainability-related risk or opportunity if

the entity does not have the skills, capabilities or resources to provide that

quantitative information.

If an entity determines that it need not provide quantitative information

about the current or anticipated financial effects of a sustainability-related

risk or opportunity applying the criteria set out in paragraphs 38–39, the

entity shall:

(a)

explain why it has not provided quantitative information;

(b)

provide qualitative information about those financial effects, including

identifying line items, totals and subtotals within the related financial

statements that are likely to be affected, or have been affected, by that

sustainability-related risk or opportunity; and

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

(c)

provide quantitative information about the combined financial effects

of that sustainability-related risk or opportunity with other

sustainability-related risks or opportunities and other factors unless

the entity determines that quantitative information about the

combined financial effects would not be useful.

Resilience

An entity shall disclose information that enables users of general purpose

financial reports to understand its capacity to adjust to the uncertainties

arising from sustainability-related risks. An entity shall disclose a qualitative

and, if applicable, quantitative assessment of the resilience of its strategy and

business model in relation to its sustainability-related risks, including

information about how the assessment was carried out and its time horizon.

When providing quantitative information, an entity may disclose a single

amount or a range.

Other IFRS Sustainability Disclosure Standards may specify the type of

information an entity is required to disclose about its resilience to specific

sustainability-related risks and how to prepare those disclosures, including

whether a scenario analysis is required.

Risk management

The objective of sustainability-related financial disclosures on risk

management is to enable users of general purpose financial reports:

(a)

to understand an entity’s processes to identify, assess, prioritise and

monitor sustainability-related risks and opportunities, including

whether and how those processes are integrated into and inform

the entity’s overall risk management process; and

(b)

to assess the entity’s overall risk profile and its overall risk

management process.

To achieve this objective, an entity shall disclose information about:

(a)

the processes and related policies the entity uses to identify, assess,

prioritise

and

monitor

sustainability-related

risks,

including

information about:

(i)

the inputs and parameters the entity uses (for example,

information about data sources and the scope of operations

covered in the processes);

(ii)

whether and how the entity uses scenario analysis to inform its

identification of sustainability-related risks;

(iii)

how the entity assesses the nature, likelihood and magnitude of

the effects of those risks (for example, whether the entity

considers qualitative factors, quantitative thresholds or other

criteria);

(iv)

whether and how the entity prioritises sustainability-related

risks relative to other types of risk;

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

(v)

how the entity monitors sustainability-related risks; and

(vi)

whether and how the entity has changed the processes it uses

compared with the previous reporting period;

(b)

the processes the entity uses to identify, assess, prioritise and monitor

sustainability-related opportunities; and

(c)

the extent to which, and how, the processes for identifying, assessing,

prioritising

and

monitoring

sustainability-related

risks

and

opportunities are integrated into and inform the entity’s overall risk

management process.

Metrics and targets

The objective of sustainability-related financial disclosures on metrics and

targets is to enable users of general purpose financial reports to

understand an entity’s performance in relation to its sustainability-related

risks and opportunities, including progress towards any targets the entity

has set, and any targets it is required to meet by law or regulation.

An entity shall disclose, for each sustainability-related risk and opportunity

that could reasonably be expected to affect the entity’s prospects:

(a)

metrics required by an applicable IFRS Sustainability Disclosure

Standard; and

(b)

metrics the entity uses to measure and monitor:

(i)

that sustainability-related risk or opportunity; and

(ii)

its performance in relation to that sustainability-related risk

or opportunity, including progress towards any targets the

entity has set, and any targets it is required to meet by law or

regulation.

In the absence of an IFRS Sustainability Disclosure Standard that specifically

applies to a sustainability-related risk or opportunity, an entity shall apply

paragraphs 57–58 to identify applicable metrics.

Metrics disclosed by an entity applying paragraphs 45–46 shall include

metrics associated with particular business models, activities or other

common features that characterise participation in an industry.

If an entity discloses a metric taken from a source other than IFRS

Sustainability Disclosure Standards, the entity shall identify the source and

the metric taken.

If a metric has been developed by an entity, the entity shall disclose

information about:

(a)

how the metric is defined, including whether it is derived by adjusting

a metric taken from a source other than IFRS Sustainability Disclosure

Standards and, if so, which source and how the metric disclosed by the

entity differs from the metric specified in that source;

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

(b)

whether the metric is an absolute measure, a measure expressed in

relation to another metric or a qualitative measure (such as a red,

amber, green—or RAG—status);

(c)

whether the metric is validated by a third party and, if so, which party;

and

(d)

the method used to calculate the metric and the inputs to the

calculation, including the limitations of the method used and the

significant assumptions made.

An entity shall disclose information about the targets it has set to monitor

progress towards achieving its strategic goals, and any targets it is required to

meet by law or regulation. For each target, the entity shall disclose:

(a)

the metric used to set the target and to monitor progress towards

reaching the target;

(b)

the specific quantitative or qualitative target the entity has set or is

required to meet;

(c)

the period over which the target applies;

(d)

the base period from which progress is measured;

(e)

any milestones and interim targets;

(f)

performance against each target and an analysis of trends or changes

in the entity’s performance; and

(g)

any revisions to the target and an explanation for those revisions.

The definition and calculation of metrics, including metrics used to set the

entity’s targets and monitor progress towards reaching them, shall be

consistent over time. If a metric is redefined or replaced, an entity shall apply

paragraph B52.

An entity shall label and define metrics and targets using meaningful, clear

and precise names and descriptions.

General requirements

Sources of guidance

Identifying sustainability-related risks and opportunities

In identifying sustainability-related risks and opportunities that could

reasonably be expected to affect an entity’s prospects, an entity shall apply

IFRS Sustainability Disclosure Standards.

In addition to IFRS Sustainability Disclosure Standards:

(a)

an entity shall refer to and consider the applicability of the disclosure

topics in the SASB Standards. An entity might conclude that the

disclosure topics in the SASB Standards are not applicable in the

entity’s circumstances.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

(b)

an entity may refer to and consider the applicability of:

(i)

the CDSB Framework Application Guidance for Water-related

Disclosures and the CDSB Framework Application Guidance for

Biodiversity-related Disclosures (collectively referred to as

‘CDSB Framework Application Guidance’);

(ii)

the most recent pronouncements of other standard‑setting

bodies whose requirements are designed to meet the

information needs of users of general purpose financial reports;

and

(iii)

the sustainability-related risks and opportunities identified by

entities that operate in the same industry(s) or geographical

region(s).

Identifying applicable disclosure requirements

In identifying applicable disclosure requirements about a sustainability-

related risk or opportunity that could reasonably be expected to affect an

entity’s prospects, an entity shall apply the IFRS Sustainability Disclosure

Standard that specifically applies to that sustainability-related risk or

opportunity.

In the absence of an IFRS Sustainability Disclosure Standard that specifically

applies to a sustainability-related risk or opportunity, an entity shall apply

judgement to identify information that:

(a)

is relevant to the decision-making of users of general purpose financial

reports; and

(b)

faithfully represents that sustainability-related risk or opportunity.

In making the judgement described in paragraph 57:

(a)

an entity shall refer to and consider the applicability of the metrics

associated with the disclosure topics included in the SASB Standards.

An entity might conclude that the metrics specified in the SASB

Standards are not applicable in the entity’s circumstances.

(b)

an entity may—to the extent that these sources do not conflict with

IFRS Sustainability Disclosure Standards—refer to and consider the

applicability of:

(i)

the CDSB Framework Application Guidance;

(ii)

the most recent pronouncements of other standard‑setting

bodies whose requirements are designed to meet the

information needs of users of general purpose financial reports;

and

(iii)

the information, including metrics, disclosed by entities that

operate in the same industry(s) or geographical region(s).

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

(c)

an entity may—to the extent that these sources assist the entity in

meeting the objective of this Standard (see paragraphs 1–4) and do not

conflict with IFRS Sustainability Disclosure Standards—refer to and

consider the applicability of the sources specified in Appendix C.

Disclosure of information about sources of guidance

An entity shall identify:

(a)

the specific standards, pronouncements, industry practice and other

sources of guidance that the entity has applied in preparing its

sustainability-related financial disclosures, including, if applicable,

identifying the disclosure topics in the SASB Standards; and

(b)

the industry(s) specified in the IFRS Sustainability Disclosure

Standards, the SASB Standards or other sources of guidance relating to

a particular industry(s) that the entity has applied in preparing its

sustainability-related financial disclosures, including in identifying

applicable metrics.

Location of disclosures

An entity is required to provide disclosures required by IFRS Sustainability

Disclosure Standards as part of its general purpose financial reports.

Subject to any regulation or other requirements that apply to an entity, there

are various possible locations in its general purpose financial reports in which

to disclose sustainability-related financial information. Sustainability-related

financial disclosures could be included in an entity’s management

commentary or a similar report when it forms part of an entity’s general

purpose financial reports. Management commentary or a similar report is a

required report in many jurisdictions. It might be known by or included in

reports with various names, such as ‘management report’, ‘management’s

discussion and analysis’, ‘operating and financial review’, ‘integrated report’ or

‘strategic report’.

An entity may disclose information required by an IFRS Sustainability

Disclosure Standard in the same location as information disclosed to meet

other requirements, such as information required by regulators. The entity

shall ensure that the sustainability-related financial disclosures are clearly

identifiable and not obscured by that additional information (see

paragraph B27).

Information required by an IFRS Sustainability Disclosure Standard may be

included in sustainability-related financial disclosures by cross-reference to

another report published by the entity. If an entity includes information by

cross-reference, the entity shall apply the requirements in paragraphs

B45–B47.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

Timing of reporting

An entity shall report its sustainability-related financial disclosures at the

same time as its related financial statements. The entity’s sustainability-

related financial disclosures shall cover the same reporting period as the

related financial statements.

Normally, an entity prepares sustainability-related financial disclosures for a

12-month period. However, for practical reasons, some entities prefer to

report, for example, for a 52-week period. This Standard does not preclude

that practice.

When an entity changes the end of its reporting period and provides

sustainability-related financial disclosures for a period longer or shorter than

12 months, it shall disclose:

(a)

the period covered by the sustainability-related financial disclosures;

(b)

the reason for using a longer or shorter period; and

(c)

the fact that the amounts disclosed in the sustainability-related

financial disclosures are not entirely comparable.

If, after the end of the reporting period but before the date on which the

sustainability-related financial disclosures are authorised for issue, an entity

receives information about conditions that existed at the end of the reporting

period, it shall update disclosures that relate to those conditions in the light of

the new information.

An entity shall disclose information about transactions, other events and

conditions that occur after the end of the reporting period, but before the date

on which the sustainability-related financial disclosures are authorised for

issue, if non-disclosure of that information could reasonably be expected to

influence decisions that primary users of general purpose financial reports

make on the basis of those reports.

This Standard does not mandate which entities would be required to provide

interim sustainability-related financial disclosures, how frequently, or how

soon after the end of an interim period. However, governments, securities

regulators, stock exchanges and accountancy bodies may require entities

whose debt or equity securities are publicly traded to publish interim general

purpose financial reports. If an entity is required or elects to publish interim

sustainability-related

financial

disclosures

accordance

with

IFRS

Sustainability Disclosure Standards, the entity shall apply paragraph B48.

Comparative information

Unless another IFRS Sustainability Disclosure Standard permits or requires

otherwise, an entity shall disclose comparative information in respect of

the preceding period for all amounts disclosed in the reporting period. If

such information would be useful for an understanding of the

sustainability-related financial disclosures for the reporting period, the

entity shall also disclose comparative information for narrative and

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

descriptive sustainability-related financial information (see paragraphs

B49–B59).

Amounts reported in sustainability-related financial disclosures might relate,

for example, to metrics and targets or to current and anticipated financial

effects of sustainability-related risks and opportunities.

Statement of compliance

An entity whose sustainability-related financial disclosures comply with all

the requirements of IFRS Sustainability Disclosure Standards shall make an

explicit and unreserved statement of compliance. An entity shall not

describe sustainability-related financial disclosures as complying with IFRS

Sustainability Disclosure Standards unless they comply with all the

requirements of IFRS Sustainability Disclosure Standards.

This Standard relieves an entity from disclosing information otherwise

required by an IFRS Sustainability Disclosure Standard if law or regulation

prohibits the entity from disclosing that information (see paragraph B33). This

Standard also relieves an entity from disclosing information about a

sustainability-related opportunity otherwise required by an IFRS Sustainability

Disclosure Standard if that information is commercially sensitive as described

in this Standard (see paragraphs B34–B37). An entity using these exemptions is

not prevented from asserting compliance with IFRS Sustainability Disclosure

Standards.

Judgements, uncertainties and errors

Judgements

An entity shall disclose information to enable users of general purpose

financial reports to understand the judgements, apart from those involving

estimations of amounts (see paragraph 77), that the entity has made in the

process of preparing its sustainability-related financial disclosures and that

have the most significant effect on the information included in those

disclosures.

In the process of preparing sustainability-related financial disclosures, an

entity makes various judgements, apart from those involving estimations, that

can significantly affect the information reported in the entity’s sustainability-

related financial disclosures. For example, an entity makes judgements in:

(a)

identifying sustainability-related risks and opportunities that could be

reasonably expected to affect the entity’s prospects;

(b)

determining which sources of guidance to apply in accordance with

paragraphs 54–58;

(c)

identifying material information to include in the sustainability-

related financial disclosures; and

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

(d)

assessing whether an event or change in circumstances is significant

and requires reassessment of the scope of all affected sustainability-

related risks and opportunities throughout the entity’s value chain (see

paragraph B11).

Other IFRS Sustainability Disclosure Standards may require disclosure of some

of the information that an entity would otherwise be required to disclose in

accordance with paragraph 74.

Measurement uncertainty

An entity shall disclose information to enable users of general purpose

financial reports to understand the most significant uncertainties affecting

the amounts reported in its sustainability-related financial disclosures.

An entity shall:

(a)

identify the amounts that it has disclosed that are subject to a high

level of measurement uncertainty; and

(b)

in relation to each amount identified in paragraph 78(a), disclose

information about:

(i)

the sources of measurement uncertainty—for example, the

dependence of the amount on the outcome of a future event,

on a measurement technique or on the availability and

quality of data from the entity’s value chain; and

(ii)

the assumptions, approximations and judgements the entity

has made in measuring the amount.

When amounts reported in sustainability-related financial disclosures cannot

be measured directly and can only be estimated, measurement uncertainty

arises. In some cases, an estimate involves assumptions about possible future

events with uncertain outcomes. The use of reasonable estimates is an

essential part of preparing sustainability-related financial disclosures and does

not undermine the usefulness of the information if the estimates are

accurately described and explained. Even a high level of measurement

uncertainty would not necessarily prevent such an estimate from providing

useful information.

The requirement in paragraph 77 for an entity to disclose information about

the uncertainties affecting the amounts reported in sustainability-related

financial disclosures relates to the estimates that require the entity’s most

difficult, subjective or complex judgements. As the number of variables and

assumptions increases, those judgements become more subjective and

complex, and the uncertainty affecting the amounts reported in the

sustainability-related financial disclosures increases accordingly.

The type and extent of the information an entity might need to disclose vary

according to the nature of the amount reported in the sustainability-related

financial disclosures—the sources of and the factors contributing to the

uncertainty and other circumstances. Examples of the type of information an

entity might need to disclose are:

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

(a)

the nature of the assumption or other source of measurement

uncertainty;

(b)

the sensitivity of the disclosed amount to the methods, assumptions

and estimates underlying its calculation, including the reasons for the

sensitivity;

(c)

the expected resolution of an uncertainty and the range of reasonably

possible outcomes for the disclosed amount; and

(d)

an explanation of changes made to past assumptions concerning the

disclosed amount, if the uncertainty remains unresolved.

Other IFRS Sustainability Disclosure Standards may require disclosure of some

of the information that an entity would otherwise be required to disclose in

accordance with paragraphs 77–78.

Errors

An entity shall correct material prior period errors by restating the

comparative amounts for the prior period(s) disclosed unless it is

impracticable to do so.

Prior period errors are omissions from and misstatements in the entity’s

sustainability-related financial disclosures for one or more prior periods. Such

errors arise from a failure to use, or the misuse of, reliable information that:

(a)

was available when the sustainability-related financial disclosures for

that period(s) were authorised for issue; and

(b)

could reasonably be expected to have been obtained and considered in

the preparation of those disclosures.

Corrections of errors are distinguished from changes in estimates. Estimates

are approximations that an entity might need to revise as additional

information becomes known.

If an entity identifies a material error in its prior period sustainability-related

financial disclosures, it shall apply paragraphs B55–B59.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

Appendix A

Defined terms

This appendix is an integral part of IFRS S1 and has the same authority as the other parts of the

Standard.

business model

An entity’s system of transforming inputs through its activities

into outputs and outcomes that aims to fulfil the entity’s

strategic purposes and create value for the entity and hence

generate cash flows over the short, medium and long term.

disclosure topic

A specific sustainability-related risk or opportunity based on

the activities conducted by entities within a particular industry

as set out in an IFRS Sustainability Disclosure Standard or a

SASB Standard.

general purpose

financial reports

Reports that provide financial information about a reporting

entity that is useful to primary users in making decisions

relating to providing resources to the entity. Those decisions

involve decisions about:

(a)

buying, selling or holding equity and debt instruments;

(b)

providing or selling loans and other forms of credit; or

(c)

exercising rights to vote on, or otherwise influence, the

entity’s management’s actions that affect the use of the

entity’s economic resources.

General purpose financial reports include—but are not

restricted to—an entity’s general purpose financial statements

and sustainability-related financial disclosures.

IFRS Sustainability

Disclosure Standards

Standards

that

name

issued

the

International

Sustainability Standards Board.

impracticable

Applying a requirement is impracticable when an entity cannot

apply it after making every reasonable effort to do so.

material information

In the context of sustainability-related financial disclosures,

information is material if omitting, misstating or obscuring

that information could reasonably be expected to influence

decisions that primary users of general purpose financial

reports make on the basis of those reports, which include

financial

statements

and

sustainability-related

financial

disclosures and which provide information about a specific

reporting entity.

primary users of

general purpose

financial reports

(primary users)

Existing and potential investors, lenders and other creditors.

reporting entity

An entity that is required, or chooses, to prepare general

purpose financial statements.

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

scenario analysis

A process for identifying and assessing a potential range of

outcomes of future events under conditions of uncertainty.

sustainability-related

financial disclosures

A particular form of general purpose financial reports that

provide information about the reporting entity’s sustainability-

related risks and opportunities that could reasonably be

expected to affect the entity’s cash flows, its access to finance

or cost of capital over the short, medium or long term,

including information about the entity’s governance, strategy

and risk management in relation to those risks and

opportunities, and related metrics and targets.

users of general

purpose financial

reports (users)

See primary users of general purpose financial reports

(primary

users).

These

definitions

describe

the

same

population.

value chain

The full range of interactions, resources and relationships

related to a reporting entity’s business model and the external

environment in which it operates.

A value chain encompasses the interactions, resources and

relationships an entity uses and depends on to create its

products or services from conception to delivery, consumption

and

end-of-life,

including

interactions,

resources

and

relationships in the entity’s operations, such as human

resources; those along its supply, marketing and distribution

channels, such as materials and service sourcing, and product

and service sale and delivery; and the financing, geographical,

geopolitical and regulatory environments in which the entity

operates.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

Appendix B

Application guidance

This appendix is an integral part of IFRS S1 and has the same authority as the other parts of the

Standard.

Sustainability-related risks and opportunities (paragraphs 11–12)

This Standard requires an entity to disclose information about all

sustainability-related risks and opportunities that could reasonably be

expected to affect the entity’s cash flows, its access to finance or cost of capital

over the short, medium or long term (referred to as ‘sustainability-related

risks and opportunities that could reasonably be expected to affect the entity’s

prospects’) (see paragraph 3).

An entity’s sustainability-related risks and opportunities arise out of the

interactions between the entity and its stakeholders, society, the economy and

the natural environment throughout the entity’s value chain. These

interactions—which can be direct and indirect—result from operating an

entity’s business model in pursuit of the entity’s strategic purposes and from

the external environment in which the entity operates. These interactions

take place within an interdependent system in which an entity both depends

on resources and relationships throughout its value chain to generate cash

flows and affects those resources and relationships through its activities and

outputs—contributing to the preservation, regeneration and development of

those resources and relationships or to their degradation and depletion. These

dependencies and impacts might give rise to sustainability-related risks and

opportunities that could reasonably be expected to affect an entity’s cash

flows, its access to finance and cost of capital over the short, medium and long

term.

For example, if an entity’s business model depends on a natural resource—

such as water—the entity could both affect and be affected by the quality,

availability and affordability of that resource. Specifically, degradation or

depletion of that resource—including resulting from the entity’s own

activities and from other factors—could create a risk of disruption to the

entity’s operations and affect the entity’s business model or strategy and could

ultimately negatively affect the entity’s financial performance and financial

position. In contrast, regeneration and preservation of that resource—

including resulting from the entity’s own activities and from other factors—

could positively affect the entity. Similarly, if an entity operates in a highly

competitive market and requires a highly specialised workforce to achieve its

strategic purposes, the entity’s future success will likely depend on the entity’s

ability to attract and retain that resource. At the same time, that ability will

depend, in part, on the entity’s employment practices—such as whether the

entity invests in employee training and wellbeing—and the levels of employee

satisfaction, engagement and retention. These examples illustrate the close

relationship between the value the entity creates, preserves or erodes for

others and the entity’s own ability to succeed and achieve its goals.

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

Resources and relationships that an entity depends on and affects by its

activities and outputs can take various forms, such as natural, manufactured,

intellectual, human, social or financial. They can be internal—such as the

entity’s workforce, its know-how or its organisational processes—or they can

be external—such as materials and services the entity needs to access or the

relationships it has with suppliers, distributors and customers. Furthermore,

resources and relationships include, but are not limited to, the resources and

relationships recognised as assets in the entity’s financial statements.

An entity’s dependencies and impacts are not limited to resources the entity

engages with directly, and to the entity’s direct relationships. Those

dependencies and impacts also relate to resources and relationships

throughout the entity’s value chain. For example, they can relate to the

entity’s supply and distribution channels; the effects of the consumption and

disposal of the entity’s products; and the entity’s sources of finance and its

investments, including investments in associates and joint ventures. If the

entity’s business partners throughout its value chain face sustainability-

related risks and opportunities, the entity could be exposed to related

consequences of its own.

Identifying sustainability-related risks and opportunities

An entity shall use all reasonable and supportable information that is

available to the entity at the reporting date without undue cost or effort (see

paragraphs B8–B10):

(a)

to identify the sustainability-related risks and opportunities that could

reasonably be expected to affect the entity’s prospects; and

(b)

to determine the scope of its value chain, including its breadth and

composition, in relation to each of those sustainability-related risks

and opportunities.

In identifying the sustainability-related risks and opportunities that could

reasonably be expected to affect its prospects, an entity shall apply the

requirements on sources of guidance in paragraphs 54–55.

Reasonable and supportable information

Reasonable and supportable information used by an entity in preparing its

sustainability-related financial disclosures shall cover factors that are specific

to the entity as well as general conditions in the external environment. In

some

cases—such

identifying

sustainability-related

risks

and

opportunities that could reasonably be expected to affect an entity’s prospects

—reasonable and supportable information includes information about past

events, current conditions and forecasts of future conditions. Other IFRS

Sustainability Disclosure Standards may specify what is reasonable and

supportable information in specific cases.

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

An entity may use various sources of data that may be both internal and

external. Possible data sources include the entity’s risk management

processes; industry and peer group experience; and external ratings, reports

and statistics. Information that is used by the entity in preparing its financial

statements, operating its business model, setting its strategy and managing its

risks and opportunities is considered to be available to the entity without

undue cost or effort.

An entity need not undertake an exhaustive search for information to identify

sustainability-related risks and opportunities that could reasonably be

expected to affect the entity’s prospects. The assessment of what constitutes

undue cost or effort depends on the entity’s specific circumstances and

requires a balanced consideration of the costs and efforts for the entity and

the benefits of the resulting information for primary users. That assessment

can change over time as circumstances change.

Reassessment of the scope of sustainability-related risks

and opportunities throughout the value chain

On the occurrence of a significant event or significant change in

circumstances, an entity shall reassess the scope of all affected sustainability-

related risks and opportunities throughout its value chain. A significant event

or significant change in circumstances can occur without the entity being

involved in that event or change in circumstances or as a result of a change in

what the entity assesses to be important to users of general purpose financial

reports. For example, such significant events or significant changes in

circumstances might include:

(a)

a significant change in the entity’s value chain (for example, a supplier

in the entity’s value chain makes a change that significantly alters the

supplier’s greenhouse gas emissions);

(b)

a significant change in the entity’s business model, activities or

corporate structure (for example, a merger or acquisition that expands

the entity’s value chain); and

(c)

a significant change in an entity’s exposure to sustainability-related

risks and opportunities (for example, a supplier in the entity’s value

chain is affected by the introduction of a new regulation that the

entity had not anticipated).

An entity is permitted, but not required, to reassess the scope of any

sustainability-related risk or opportunity throughout its value chain more

frequently than required by paragraph B11.

Materiality (paragraphs 17–19)

Paragraph 17 requires an entity to disclose material information about the

sustainability-related risks and opportunities that could reasonably be

expected to affect the entity’s prospects. Materiality of information is judged

in relation to whether omitting, misstating or obscuring that information

could reasonably be expected to influence decisions of primary users of

B10

B11

B12

B13

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

general purpose financial reports, which provide information about a specific

reporting entity.

The decisions of primary users relate to providing resources to the entity and

involve decisions about:

(a)

buying, selling or holding equity and debt instruments;

(b)

providing or selling loans and other forms of credit; or

(c)

exercising rights to vote on, or otherwise influence, the entity’s

management’s actions that affect the use of the entity’s economic

resources.

The decisions described in paragraph B14 depend on primary users’

expectations about returns, for example, dividends, principal and interest

payments or market price increases. Those expectations depend on primary

users’ assessment of the amount, timing and uncertainty of future net cash

inflows to the entity and on their assessment of stewardship of the entity’s

economic resources by the entity’s management and its governing body(s) or

individual(s).

Assessing whether information could reasonably be expected to influence the

decisions made by primary users requires consideration of the characteristics

of those users and of the entity’s own circumstances.

Sustainability-related financial disclosures are prepared for primary users who

have reasonable knowledge of business and economic activities and who

review and analyse information diligently. At times, even well-informed and

diligent users may need to seek the aid of an adviser to understand

sustainability-related financial information.

Individual primary users may have different, and sometimes even conflicting,

information needs and desires. Information needs of primary users may also

evolve over time. Sustainability-related financial disclosures are intended to

meet common information needs of primary users.

Identifying material information

Materiality judgements are specific to an entity. Consequently, this Standard

does not specify any thresholds for materiality or predetermine what would

be material in a particular situation.

To identify material information about a sustainability-related risk or

opportunity, an entity shall apply, as the starting point, the requirements of

the IFRS Sustainability Disclosure Standard that specifically applies to that

sustainability-related risk or opportunity. In the absence of an IFRS

Sustainability Disclosure Standard that specifically applies to a sustainability-

related risk or opportunity, the entity shall apply the requirements on sources

of guidance specified in paragraphs 57–58. Those sources specify information,

including metrics, that may be relevant to a particular sustainability-related

risk or opportunity, to a particular industry or in specified circumstances.

B14

B15

B16

B17

B18

B19

B20

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

An entity shall assess whether the information identified in applying

paragraph B20, either individually or in combination with other information,

is material in the context of the entity’s sustainability-related financial

disclosures taken as a whole. In assessing whether information is material, an

entity shall consider both quantitative and qualitative factors. For example, an

entity might consider the magnitude and the nature of the effect of a

sustainability-related risk or opportunity on the entity.

In some cases, IFRS Sustainability Disclosure Standards require the disclosure

of information about possible future events with uncertain outcomes. In

judging whether information about such possible future events is material, an

entity shall consider:

(a)

the potential effects of the events on the amount, timing and

uncertainty of the entity’s future cash flows over the short, medium

and long term (referred to as ‘the possible outcome’); and

(b)

the range of possible outcomes and the likelihood of the possible

outcomes within that range.

When considering possible outcomes, an entity shall consider all pertinent

facts and circumstances. Information about a possible future event is more

likely to be judged as being material if the potential effects are significant and

the event is likely to occur. However, an entity shall also consider whether

information about low-probability and high-impact outcomes might be

material either individually or in combination with information about other

low-probability and high-impact outcomes. For example, an entity might be

exposed to several sustainability-related risks, each of which could cause the

same type of disruption—such as disruption to the entity’s supply chain.

Information about an individual source of risk might not be material if

disruption from that source is highly unlikely to occur. However, information

about the aggregate risk—the risk of supply chain disruption from all sources

—might be material.

If a possible future event is expected to affect an entity’s cash flows, but only

many years in the future, information about that event is usually less likely to

be judged material than information about a possible future event with

similar effects that are expected to occur sooner. However, in some

circumstances, an item of information could reasonably be expected to

influence primary users’ decisions regardless of the magnitude of the

potential effects of the future event or the timing of that event. For example,

this might happen if information about a particular sustainability-related risk

or opportunity is highly scrutinised by primary users of an entity’s general

purpose financial reports.

An entity need not disclose information otherwise required by an IFRS

Sustainability Disclosure Standard if the information is not material. This is

the case even if the IFRS Sustainability Disclosure Standard contains a list of

specific requirements or describes them as minimum requirements.

B21

B22

B23

B24

B25

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

An entity shall disclose additional information when compliance with the

specifically applicable requirements in an IFRS Sustainability Disclosure

Standard is insufficient to enable users of general purpose financial reports to

understand the effects of sustainability-related risks and opportunities on the

entity’s cash flows, its access to finance and cost of capital over the short,

medium and long term.

An entity shall identify its sustainability-related financial disclosures clearly

and distinguish them from other information provided by the entity (see

paragraph 62). An entity shall not obscure material information. Information

is obscured if it is communicated in a way that would have a similar effect for

primary users to omitting or misstating that information. Examples of

circumstances that might result in material information being obscured

include:

(a)

material information is not clearly distinguished from additional

information that is not material;

(b)

material information is disclosed in the sustainability-related financial

disclosures, but the language used is vague or unclear;

(c)

material information about a sustainability-related risk or opportunity

is scattered throughout the sustainability-related financial disclosures;

(d)

items of information that are dissimilar are inappropriately

aggregated;

(e)

items

information

that

are

similar

are

inappropriately

disaggregated; and

(f)

the understandability of the sustainability-related financial disclosures

is reduced as a result of material information being hidden by

immaterial information to the extent that a primary user is unable to

determine what information is material.

An entity shall reassess its materiality judgements at each reporting date to

take account of changed circumstances and assumptions. Because of changes

in the entity’s individual circumstances, or in the external environment, some

types of information included in an entity’s sustainability-related financial

disclosures for prior periods might no longer be material. Conversely, some

types of information not previously disclosed might become material.

Aggregation and disaggregation

When an entity applies IFRS Sustainability Disclosure Standards, it shall

consider all facts and circumstances and decide how to aggregate and

disaggregate information in its sustainability-related financial disclosures. The

entity shall not reduce the understandability of its sustainability-related

financial disclosures by obscuring material information with immaterial

information or by aggregating material items of information that are

dissimilar to each other.

B26

B27

B28

B29

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

An entity shall not aggregate information if doing so would obscure

information that is material. Information shall be aggregated if items of

information have shared characteristics and shall not be aggregated if they do

not have shared characteristics. The entity might need to disaggregate

information about sustainability-related risks and opportunities, for example,

by geographical location or in consideration of the geopolitical environment.

For example, to ensure that material information is not obscured, an entity

might need to disaggregate information about its use of water to distinguish

between water drawn from abundant sources and water drawn from water-

stressed areas.

Interaction with law or regulation

Law or regulation might specify requirements for an entity to disclose

sustainability-related information in its general purpose financial reports. In

such circumstances, the entity is permitted to include in its sustainability-

related financial disclosures information to meet legal or regulatory

requirements, even if that information is not material. However, such

information shall not obscure material information.

An entity shall disclose material sustainability-related financial information,

even if law or regulation permits the entity not to disclose such information.

An entity need not disclose information otherwise required by an IFRS

Sustainability Disclosure Standard if law or regulation prohibits the entity

from disclosing that information. If an entity omits material information for

that reason, it shall identify the type of information not disclosed and explain

the source of the restriction.

Commercially sensitive information

If an entity determines that information about a sustainability-related

opportunity is commercially sensitive in the limited circumstances described

in paragraph B35, the entity is permitted to omit that information from its

sustainability-related financial disclosures. Such an omission is permitted even

if information is otherwise required by an IFRS Sustainability Disclosure

Standard and the information is material.

An entity qualifies for the exemption specified in paragraph B34 if, and only

if:

(a)

information about the sustainability-related opportunity is not already

publicly available;

(b)

disclosure of that information could reasonably be expected to

prejudice seriously the economic benefits the entity would otherwise

be able to realise in pursuing the opportunity; and

(c)

the entity has determined that it is impossible to disclose that

information in a manner—for example, at an aggregated level—that

would enable the entity to meet the objectives of the disclosure

requirements without prejudicing seriously the economic benefits the

entity would otherwise be able to realise in pursuing the opportunity.

B30

B31

B32

B33

B34

B35

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

If an entity elects to use the exemption specified in paragraph B34, the entity

shall, for each item of information omitted:

(a)

disclose the fact that it has used the exemption; and

(b)

reassess, at each reporting date, whether the information qualifies for

the exemption.

An entity is prohibited from using the exemption specified in paragraph B34

in relation to a sustainability-related risk or as a basis for broad non-disclosure

of sustainability-related financial information.

Reporting entity (paragraph 20)

Paragraph 20 requires that sustainability-related financial disclosures shall be

for the same reporting entity as the related financial statements. For example,

consolidated financial statements prepared in accordance with IFRS

Accounting Standards provide information about the parent and its

subsidiaries as a single reporting entity. Consequently, that entity’s

sustainability-related financial disclosures shall enable users of general

purpose financial reports to understand the effects of the sustainability-

related risks and opportunities on the cash flows, access to finance and cost of

capital over the short, medium and long term for the parent and its

subsidiaries.

Connected information (paragraphs 21–24)

Paragraph 21 requires an entity to provide information in a manner that

enables users of general purpose financial reports to understand connections

both between the items to which the information relates and between

disclosures provided by the entity in its general purpose financial reports.

Connected information provides insight into connections between the items to

which the information relates. For example:

(a)

if an entity pursued a particular sustainability-related opportunity and

that resulted in an increase in the entity’s revenue, connected

information will depict that relationship between the entity’s strategy

and its financial performance;

(b)

if an entity identified a trade-off between two sustainability-related

risks it is exposed to and took action on the basis of its assessment of

that trade-off, connected information will depict the relationship

between those risks and the entity’s strategy; and

(c)

if an entity committed to a particular sustainability-related target, but

that commitment has not yet affected the entity’s financial position or

financial performance because the applicable recognition criteria have

not been met, connected information will depict that relationship.

Connected information includes:

(a)

connections between various types of information about a particular

sustainability-related risk or opportunity, such as:

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(i)

between

disclosures

governance,

strategy

and

risk

management; and

(ii)

between narrative information and quantitative information

(including related metrics and targets and information in the

related financial statements).

(b)

connections between disclosures about various sustainability-related

risks and opportunities. For example, if an entity integrates its

oversight of sustainability-related risks and opportunities, the entity

shall integrate the disclosures on governance instead of providing

separate disclosures on governance for each sustainability-related risk

and opportunity.

Drawing connections between disclosures involves, but is not limited to,

providing necessary explanations and cross-references and using consistent

data, assumptions, and units of measure. In providing connected information,

an entity shall:

(a)

explain connections between disclosures in a clear and concise

manner;

(b)

avoid unnecessary duplication if IFRS Sustainability Disclosure

Standards require the disclosure of common items of information; and

(c)

disclose information about significant differences between the data

and assumptions used in preparing the entity’s sustainability-related

financial disclosures and the data and assumptions used in preparing

the related financial statements.

For example, in providing connected information an entity might need to

explain the effect or likely effect of its strategy on its financial statements and

financial planning, or explain how that strategy relates to the metrics the

entity uses to measure progress against targets. Another entity might need to

explain how its use of natural resources or changes within its supply chain

could amplify or, in contrast, reduce its sustainability-related risks and

opportunities. The entity might need to link the information about its use of

natural resources or changes within its supply chain to information about

current or anticipated financial effects on the entity’s production costs, its

strategic response to mitigate those risks and its related investment in new

assets. The entity might need to link narrative information to the related

metrics and targets and to information in the related financial statements.

Other examples of connected information include:

(a)

an explanation of the combined effects of the entity’s sustainability-

related risks and opportunities and its strategy on its financial

position, financial performance and cash flows over the short, medium

and long term. For example, an entity might face decreasing demand

for its products because of consumer preferences for lower-carbon

alternatives. The entity might need to explain how its strategic

response, such as closing a major factory, could affect its workforce

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IFRS SUSTAINABILITY DISCLOSURE STANDARDS

and local communities, and the effect of such a closure on the useful

lives of its assets and on impairment assessments.

(b)

a description of the alternatives that an entity evaluated in setting its

strategy

response

its

sustainability-related

risks

and

opportunities, including a description of the trade-offs between those

risks and opportunities that the entity considered (see paragraph 33(c)).

For example, an entity might need to explain the potential effects of its

decision to restructure its operations in response to a sustainability-

related risk on the future size and composition of the entity’s

workforce.

Information included by cross-reference (paragraph 63)

Information required by an IFRS Sustainability Disclosure Standard might be

available in another report published by the entity. For example, the required

information could be disclosed in the related financial statements. Material

information can be included in an entity’s sustainability-related financial

disclosures by cross-reference, provided that:

(a)

the cross-referenced information is available on the same terms and at

the same time as the sustainability-related financial disclosures; and

(b)

the complete set of sustainability-related financial disclosures is not

made less understandable by including information by cross-reference.

Information included by cross-reference becomes part of the complete set of

sustainability-related financial disclosures and shall comply with the

requirements of IFRS Sustainability Disclosure Standards. For example, it

needs to be relevant, representationally faithful, comparable, verifiable, timely

and understandable. The body(s) or individual(s) that authorises the general

purpose financial reports takes the same responsibility for the information

included by cross-reference as it does for the information included directly.

If information required by an IFRS Sustainability Disclosure Standard is

included by cross-reference:

(a)

the sustainability-related financial disclosures shall clearly identify the

report within which that information is located and explain how to

access that report; and

(b)

the cross-reference shall be to a precisely specified part of that report.

Interim reporting (paragraph 69)

In the interest of timeliness and cost considerations, and to avoid repetition of

information previously reported, an entity may be required or choose to

provide less information at interim dates than it provides in its annual

sustainability-related financial disclosures. Interim sustainability-related

financial disclosures are intended to provide an update on the latest complete

set of annual disclosures of sustainability-related financial information. These

disclosures focus on new information, events and circumstances and do not

duplicate information previously reported. Although the information

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provided in interim sustainability-related financial disclosures may be more

condensed than in annual sustainability-related financial disclosures, an

entity is not prohibited or discouraged from publishing a complete set of

sustainability-related financial disclosures as specified in this Standard as part

of its interim general purpose financial report.

Comparative information (paragraphs 52, 70 and 83–86)

Paragraph 70 requires an entity to disclose comparative information in respect

of the preceding period for all amounts disclosed in the reporting period.

Metrics

In some cases, the amount disclosed for a metric is an estimate. Except as

specified in paragraph B51, if an entity identifies new information in relation

to the estimated amount disclosed in the preceding period and the new

information provides evidence of circumstances that existed in that period,

the entity shall:

(a)

disclose a revised comparative amount that reflects that new

information;

(b)

disclose the difference between the amount disclosed in the preceding

period and the revised comparative amount; and

(c)

explain the reasons for revising the comparative amount.

In applying the requirement in paragraph B50, an entity need not disclose a

revised comparative amount:

(a)

if it is impracticable to do so (see paragraph B54).

(b)

if the metric is forward-looking. Forward-looking metrics relate to

possible future transactions, events and other conditions. The entity is

permitted to revise a comparative amount for a forward-looking metric

if doing so does not involve the use of hindsight.

If an entity redefines or replaces a metric in the reporting period, the entity

shall:

(a)

disclose a revised comparative amount, unless it is impracticable to do

so;

(b)

explain the changes; and

(c)

explain the reasons for those changes, including why the redefined or

replacement metric provides more useful information.

If an entity introduces a new metric in the reporting period, it shall disclose a

comparative amount for that metric unless it is impracticable to do so.

Sometimes, it is impracticable to revise a comparative amount to achieve

comparability with the reporting period. For example, data might not have

been collected in the preceding period in a way that allows retrospective

application of a new definition of a metric, and it might be impracticable to

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IFRS SUSTAINABILITY DISCLOSURE STANDARDS

recreate the data. If it is impracticable to revise a comparative amount for the

preceding period, an entity shall disclose that fact.

Errors

Paragraph 83 requires an entity to correct material prior period errors.

Such errors include: the effects of mathematical mistakes, mistakes in

applying

the

definitions

for

metrics

targets,

oversights

misinterpretations of facts, and fraud.

Potential reporting period errors discovered in that period are corrected before

the sustainability-related financial disclosures are authorised for issue.

However, material errors are sometimes not discovered until a subsequent

period.

If an entity identifies a material error in its prior period(s) sustainability-

related financial disclosures, it shall disclose:

(a)

the nature of the prior period error;

(b)

the correction, to the extent practicable, for each prior period

disclosed; and

(c)

if correction of the error is impracticable, the circumstances that led to

the existence of that condition and a description of how and from

when the error has been corrected.

When it is impracticable to determine the effect of an error on all prior

periods presented, the entity shall restate the comparative information to

correct the error from the earliest date practicable.

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Appendix C

Sources of guidance

This appendix is an integral part of IFRS S1 and has the same authority as the other parts of the

Standard.

This Standard requires (see paragraph 57) that in the absence of an IFRS

Sustainability Disclosure Standard that specifically applies to a sustainability-

related risk or opportunity, an entity shall apply judgement to identify

information that:

(a)

is relevant to the decision-making of users of general purpose financial

reports; and

(b)

faithfully represents that sustainability-related risk or opportunity.

In making that judgement, an entity may—to the extent that these sources

assist the entity in meeting the objective of this Standard (see paragraphs 1–4)

and do not conflict with IFRS Sustainability Disclosure Standards—refer to

and consider the applicability of:

(a)

the Global Reporting Initiative Standards; and

(b)

the European Sustainability Reporting Standards.

In applying the sources of guidance specified in paragraph C2, an entity shall

not obscure material information required by IFRS Sustainability Disclosure

Standards (see paragraph B27). If an entity applies the sources of guidance

specified in paragraph C2 without applying the requirements in IFRS

Sustainability Disclosure Standards, the entity shall not make an explicit and

unreserved statement of compliance with IFRS Sustainability Disclosure

Standards.

IFRS SUSTAINABILITY DISCLOSURE STANDARDS

Appendix D

Qualitative characteristics of useful sustainability-related

financial information

This appendix is an integral part of IFRS S1 and has the same authority as the other parts of the

Standard.

Introduction

The Conceptual Framework for Financial Reporting (Conceptual Framework) was

issued by the International Accounting Standards Board (IASB). It describes

the objective of, and the concepts that apply to, general purpose financial

reports. One purpose of the Conceptual Framework is to assist the IASB to

develop IFRS Accounting Standards for preparing financial statements based

on consistent concepts.

Sustainability-related financial disclosures are part of general purpose

financial reports. The qualitative characteristics in the Conceptual Framework,

therefore, apply to sustainability-related financial information. However, the

nature of some of the information required to meet the objective of this

Standard (see paragraphs 1–4) differs in some respects from the information

provided in financial statements.

Sustainability-related financial information is useful if it is relevant and

faithfully represents what it purports to represent. Relevance and faithful

representation

are

fundamental

qualitative

characteristics

useful

sustainability-related financial information. The usefulness of sustainability-

related financial information is enhanced if the information is comparable,

verifiable, timely and understandable. Comparability, verifiability, timeliness

and understandability are enhancing characteristics of useful sustainability-

related financial information.

Fundamental qualitative characteristics of useful sustainability-

related financial information

Relevance

Relevant sustainability-related financial information is capable of making a

difference in the decisions made by primary users. Information may be

capable of making a difference in a decision even if some users choose not to

take advantage of it or are already aware of it from other sources.

Sustainability-related financial information is capable of making a difference

in decisions made by users if it has predictive value, confirmatory value or

both.

Sustainability-related financial information has predictive value if it can be

used as an input to processes employed by primary users to predict future

outcomes. Sustainability-related financial information need not be a

prediction or forecast to have predictive value. Sustainability-related financial

information with predictive value is employed by primary users in making

their own predictions. For example, information about water quality, which

IFRS S1 GENERAL REQUIREMENTS FOR DISCLOSURE OF SUSTAINABILITY-

RELATED FINANCIAL INFORMATION—JUNE 2023

can include information about the water being polluted, could inform the

expectations of users about the ability of an entity to meet local water-quality

requirements.

Sustainability-related financial information has confirmatory value if it

provides feedback about (confirms or changes) previous evaluations.

The predictive value and confirmatory value of sustainability-related financial

information are interrelated. Information that has predictive value often also

has confirmatory value. For example, information for the current year about

greenhouse gas emissions, which can be used as the basis for predicting

greenhouse gas emissions in future years, can also be compared with

predictions about greenhouse gas emissions for the current year that were

made in past years. The results of those comparisons can help a user to correct

and improve the processes that were used to make those previous predictions.

Materiality

Information is material if omitting, misstating or obscuring that information

could reasonably be expected to influence decisions that the primary users of

general purpose financial reports make on the basis of those reports, which

provide information about a specific reporting entity. In other words,

materiality is an entity-specific aspect of relevance. The materiality of

information is assessed in the context of an entity’s sustainability-related

financial disclosures and is based on the nature or magnitude of the item to

which the information relates, or both.

Faithful representation

Sustainability-related financial information represents phenomena in words

and numbers. To be useful, the information must not only represent relevant

phenomena, it must also faithfully represent the substance of the phenomena

that it purports to represent.

To be a faithful representation, a depiction would be complete, neutral and

accurate. The objective of general purpose financial reports is to maximise

those qualities to the extent possible.

A complete depiction of a sustainability-related risk or opportunity includes

all material information necessary for primary users to understand that risk

or opportunity.

Sustainability-related financial information shall be neutral. A neutral

depiction is one without bias in the selection or disclosure of information.

Information is neutral if it is not slanted, weighted, emphasised, de-

emphasised or otherwise manipulated to make it more likely that primary

users will receive that information favourably or unfavourably. Neutral

information is not information without purpose or without influence on

behaviour. On the contrary, relevant information is, by definition, capable of

making a difference in users’ decisions.

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Some sustainability-related financial information—for example, targets or

plans—is aspirational. A neutral discussion of such matters covers both

aspirations and the factors that could prevent an entity from achieving these

aspirations.

Neutrality is supported by the exercise of prudence. Prudence is the exercise

of caution when making judgements under conditions of uncertainty. The

exercise of prudence means that opportunities are not overstated and risks are

not understated. Equally, the exercise of prudence does not allow for the

understatement of opportunities or the overstatement of risks.

Sustainability-related financial information shall be accurate. Information can

be accurate without being perfectly precise in all respects. The precision

needed and attainable, and the factors that make information accurate,

depend on the nature of the information and the nature of the matters to

which it relates. For example, accuracy requires that:

(a)

factual information is free from material error;

(b)

descriptions are precise;

(c)

estimates, approximations and forecasts are clearly identified as such;

(d)

no material errors are made in selecting and applying an appropriate

process for developing an estimate, approximation or forecast;

(e)

assertions and inputs used in developing estimates are reasonable and

based on information of sufficient quality and quantity; and

(f)

information on judgements about the future faithfully reflects both

those judgements and the information on which they are based.

Enhancing qualitative characteristics of useful sustainability-

related financial information

The usefulness of sustainability-related financial information is enhanced if it

is comparable, verifiable, timely and understandable.

Comparability

The decisions made by the primary users of general purpose financial reports

involve choosing between alternatives; for example, selling or holding an

investment, or investing in one reporting entity or another. Comparability is

the characteristic that enables users to identify and understand similarities in,

and differences among, items. Unlike the other qualitative characteristics,

comparability does not relate to a single item. A comparison requires at least

two items. Information is more useful to users if it is also comparable, that is,

if it can be compared with:

(a)

information provided by the entity in previous periods; and

(b)

information provided by other entities, in particular those with similar

activities or operating within the same industry.

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Sustainability-related financial disclosures shall be provided in a way that

enhances comparability.

Consistency is related to, but is not the same as, comparability. Consistency

refers to the use of the same approaches or methods for providing disclosures

about the same sustainability-related risks and opportunities, from period to

period, both by a reporting entity and other entities. Comparability is the goal;

consistency helps to achieve that goal.

Comparability is not uniformity. For information to be comparable, like

things shall look alike and different things shall look different. Comparability

of sustainability-related financial information is not enhanced by making

unlike things look alike any more than it is enhanced by making like things

look different.

Verifiability

Verifiability helps to give users confidence that information is complete,

neutral and accurate. Information is verifiable if it is possible to corroborate

either the information itself or the inputs used to derive it. Verifiable

information is more useful to primary users than information that is not

verifiable.

Verifiability means that various knowledgeable and independent observers

could reach consensus, although not necessarily complete agreement, that a

particular depiction is a faithful representation. Quantified information need

not be a single point estimate to be verifiable. A range of possible amounts

and the related probabilities could also be verified.

Sustainability-related financial information shall be provided in a way that

enhances its verifiability. Verifiability can be enhanced by, for example:

(a)

including information that can be corroborated by comparing it with

other information available to primary users about an entity’s

business, about other businesses or about the external environment in

which the entity operates;

(b)

providing information about inputs and methods of calculation used to

produce estimates or approximations; and

(c)

providing information reviewed and agreed by the entity’s board,

board committees or equivalent bodies.

Some sustainability-related financial information will be presented as

explanations or forward-looking information. That information can be

supportable, for example by faithfully representing fact-based strategies, plans

and risk analyses. To help primary users decide whether to use such

information, an entity shall describe the underlying assumptions and methods

of producing the information, as well as other factors that provide evidence

that the information reflects the actual plans or decisions made by the entity.

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IFRS SUSTAINABILITY DISCLOSURE STANDARDS

Timeliness

Timeliness means having information available to decision-makers in time to

be capable of influencing their decisions. Generally, the older information is,

the less useful it is. However, some information may continue to be timely

long after the end of a reporting period because, for example, some users may

need to identify and assess trends.

Understandability

Sustainability-related financial information shall be clear and concise. For

sustainability-related financial disclosures to be concise, they need:

(a)

to avoid generic information, sometimes called ‘boilerplate’, that is not

specific to the entity;

(b)

to avoid duplication of information in the general purpose financial

reports, including unnecessary duplication of information also

provided in the related financial statements; and

(c)

to use clear language and clearly structured sentences and paragraphs.

The clearest form a disclosure can take will depend on the nature of the

information and might include tables, graphs or diagrams in addition to

narrative text. If graphs or diagrams are used, additional text or tables might

be necessary to avoid obscuring material detail.

Clarity might be enhanced by distinguishing information about developments

in the reporting period from ‘standing’ information that remains unchanged,

or changes little, from one period to the next—for example, by separately

describing features of an entity’s sustainability-related governance and risk

management processes that have changed since the previous reporting period.

Disclosures are concise if they include only material information. Any

immaterial information included shall be provided in a way that avoids

obscuring material information.

Some sustainability-related risks and opportunities are inherently complex

and might be difficult to present in a manner that is easy to understand. An

entity shall present such information as clearly as possible. However, complex

information about these risks and opportunities shall not be excluded from

general purpose financial reports to make those reports easier to understand.

Excluding such information would render those reports incomplete and,

therefore, possibly misleading.

The completeness, clarity and comparability of sustainability-related financial

information all rely on information being presented as a coherent whole. For

sustainability-related financial information to be coherent, it shall be

presented in a way that explains the context and the connections between the