IFRS S1 — General Requirements for Disclosure of Sustainability-related Financial InformationComprehensive Line-by-Line

Guide

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

Comprehensive Line-by-Line Explanation with Practical Examples

Covering All Critical Issues

Issued by the ISSB | Effective: Annual periods beginning on or after 1 January 2024

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1. Overview of IFRS S1
IFRS S1 was issued by the International Sustainability Standards Board (ISSB) in June 2023 and is
effective for annual reporting periods beginning on or after 1 January 2024. It establishes general
requirements for entities to disclose material information about sustainability-related risks and
opportunities to enable users of general-purpose financial reports to make informed decisions.

Purpose & Objective (Para. 1)

IFRS S1 requires 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.

1.1 Key Characteristics

Characteristic Explanation / Example
Issuing Body International Sustainability Standards Board (ISSB)
— a standard-setter under IFRS Foundation
Effective Date Annual periods beginning on or after 1 January
2024; early adoption permitted
Companion Standard IFRS S1 is the general 'umbrella' standard; IFRS S2
covers climate-specific disclosures
Building Block Entities must consider TCFD, SASB, GRI, and
CDSB frameworks as sources of guidance
Reporting Boundary Follows the boundary used in related financial
statements (consolidated group or entity level)

1.2 Structure of IFRS S1

IFRS S1 is organised around four core content pillars, mirroring the TCFD framework:
• Governance — How does the entity oversee sustainability-related risks and opportunities?
• Strategy — How do sustainability-related risks and opportunities affect the entity's strategy and
financial planning?
• Risk Management — How does the entity identify, assess, prioritise and monitor sustainability-
related risks?
• Metrics & Targets — What metrics and targets does the entity use to measure performance?

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2. Scope (Paragraphs 3–7)

IFRS S1 applies to all entities that use IFRS Accounting Standards or whose regulators require IFRS
S1 compliance. There is no size-based exclusion in the standard itself, though jurisdictions may provide
relief for smaller entities during transition.

2.1 Para. 3 — Who Must Apply IFRS S1?

Standard Text (Para. 3)
These requirements apply to an entity that is required or permitted by its jurisdictional authority
to apply IFRS Sustainability Disclosure Standards.

Critical Issue: Jurisdictional Adoption

IFRS S1 is not automatically mandatory everywhere. Each jurisdiction (e.g. EU, UK, Singapore,
Australia, Canada) decides whether and how to adopt it. Entities must check local regulations.
For example, the UK's ISSB-aligned SDR regime may require listed companies to comply from
2025.

2.2 Para. 4 — Reporting Entity Boundary

An entity applying IFRS S1 must use the same reporting boundary as its related financial statements.
This means:
• A parent entity preparing consolidated financial statements must cover the entire consolidated
group.
• If value-chain information is material, disclosures must extend beyond the direct reporting
boundary to suppliers, customers, and other value-chain participants.

Example — Reporting Boundary

EnergiCo Ltd consolidates 12 subsidiaries across 6 countries. Its IFRS S1 disclosures must
cover all 12 subsidiaries, not just the parent entity. Furthermore, if upstream emissions from
EnergiCo's coal suppliers are material to investors, Scope 3 disclosures must capture them even
though those suppliers sit outside the group boundary.

2.3 Para. 5–7 — Connection to Financial Statements

IFRS S1 requires sustainability disclosures to be issued at the same time as the related financial
statements, be consistent with them, and cross-reference the financial statements where relevant. This
ensures connectivity between sustainability information and financial performance.
• Critical Issue: Timing — Delays in financial statement publication can affect sustainability report
timing.
• Critical Issue: Consistency — If sustainability disclosures reference financial items (e.g. capital
expenditure on green assets), the figures must match the audited accounts.

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3. Core Content Requirements (Paragraphs 8–37)

The standard requires an entity to provide disclosures across four content areas for EACH material
sustainability-related risk or opportunity identified. These are not optional — if a risk or opportunity is
material, all four pillars must be addressed.

3A. Governance (Paragraphs 14–19)

Governance disclosures explain how oversight of sustainability-related risks and opportunities is
structured at the board and management level.

Paragraph Practical Example / Critical Issue

Para. 14 Board's Sustainability Committee with quarterly
Disclose the governance body or individual reporting on climate risk exposure
responsible for oversight of sustainability-
related risks

Para. 15 CEO briefs the Board twice yearly on updated risk

Disclose how the governing body is register; Board approved the Net Zero 2040 target
informed of, and considers, sustainability-
related risks

Para. 16 Chief Sustainability Officer (CSO) reports to CEO;

Disclose management's role, including the KPIs linked to executive remuneration
seniority level and how it is monitored

Para. 17-19 Risk escalation protocol: material sustainability

Explain any delegation of responsibilities incidents escalated to Board within 48 hours
and escalation processes

Critical Issue — Greenwashing Risk in Governance Disclosures

Vague statements such as 'Our Board oversees all risks including sustainability' do NOT satisfy
IFRS S1. Entities must name the specific committee or individual, explain frequency of oversight,
and describe how the governing body's skills and competencies are relevant to sustainability.
Failure to provide specifics may attract regulatory scrutiny.

Illustrative Governance Disclosure — TechManu Corp

The following illustrates a compliant governance disclosure:

Governance Disclosure Example

The Board's Risk and Audit Committee (RAC) oversees sustainability-related risks and
opportunities. The RAC consists of 5 independent directors, 2 of whom hold qualifications in
climate science and ESG risk. The RAC meets quarterly to review the sustainability risk register,
updated by the Group Sustainability Director (GSD). The GSD provides a bi-annual written
report to the RAC and an oral briefing to the full Board at every Board meeting. Material
sustainability risks exceeding a defined threshold are escalated immediately via a Board
notification protocol. In FY2024, the Board approved the revised Scope 1 and 2 emissions

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reduction target of 50% by 2030 (2019 base year), allocated USD 120 million in capital
expenditure to decarbonisation projects, and linked 15% of executive short-term incentive pay to
the achievement of interim emissions reduction milestones.

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3B. Strategy (Paragraphs 20–30)

Strategy disclosures explain how sustainability-related risks and opportunities affect an entity's
business model, strategy, and financial position, performance, and cash flows.

Para. 21 — Description of Risks and Opportunities

Entities must disclose, for each material sustainability-related risk or opportunity:
• A description of the risk or opportunity
• Whether it is a short-, medium-, or long-term risk
• The part of the business model and value chain affected
• The nature of the financial effect (e.g. revenue impact, cost increase, asset impairment)

Example — Climate Physical Risk Disclosure

FoodAgri PLC identifies extreme heat events as a material physical risk (medium-term: 5-10
years). The risk affects upstream agricultural suppliers in its value chain (40% of COGS).
Prolonged droughts could increase input costs by an estimated USD 30-50 million annually and
reduce product availability, threatening revenue of the Cereals segment (USD 800 million
turnover). The entity has disclosed this under IFRS S2 as a climate-specific risk, cross-
referenced here under IFRS S1's general requirements.

Para. 22-23 — Current and Anticipated Effects on Business Model

Entities must explain how identified risks and opportunities have affected or are expected to affect the
business model, including changes to the value chain, products, services, markets, and capital
allocation.

Critical Issue — Timeframes

IFRS S1 does not define 'short', 'medium', or 'long' term — entities must define these in their
disclosures and apply them consistently. Example: RetailCo defines short-term as 0-2 years,
medium as 3-7 years, long as 8+ years. Each risk must then be mapped to one of these defined
horizons. Inconsistency across reporting periods is a key audit concern.

Para. 24-25 — Strategy and Decision-making

Entities must disclose how sustainability-related risks and opportunities have influenced strategic and
operational decisions, including:
• Decisions to enter or exit markets, products, or geographies
• Capital allocation changes (CapEx, R&D investment)
• Acquisitions, disposals, or joint ventures driven by sustainability considerations
◦ Example: ChemCo divested its legacy plastics division in 2023 citing long-term regulatory and
reputational risks from single-use plastics, redirecting USD 500m CapEx to biodegradable
alternatives.

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Para. 26-27 — Resilience of Strategy (Scenario Analysis)

Standard Requirement
An entity shall disclose information that enables users to assess the resilience of the entity's
strategy and business model to sustainability-related risks and opportunities, including the
results of scenario analysis where performed.

Scenario analysis is a forward-looking tool used to test the resilience of an entity's strategy under
different plausible futures. It is not mandatory under IFRS S1 for all entities, but is expected where
material sustainability risks exist.

Example — Scenario Analysis Disclosure

AutoDrive Ltd conducted a two-scenario analysis for EV transition risk: Scenario A (Orderly
Transition — carbon price reaches USD 50/tonne by 2030, EV market penetration 45% globally)
and Scenario B (Disorderly Transition — carbon price spike to USD 150/tonne by 2027, rapid
regulatory bans on ICE vehicles). Under Scenario A, EBITDA impacts are manageable at -5%
with planned CapEx of USD 2bn in EV platforms. Under Scenario B, revenue from legacy ICE
segment declines 35% by 2030, requiring accelerated strategic pivot with additional CapEx of
USD 4.5bn. The Board has approved a strategy resilient under Scenario A and partially resilient
under Scenario B, with specific contingency triggers defined.

Critical Issue — Scenario Analysis Limitations

IFRS S1 does not specify which scenarios to use (unlike IFRS S2 which specifies 1.5°C and 2°C
scenarios for climate). Entities must justify their scenario choices. A single optimistic scenario is
insufficient. Auditors and regulators will scrutinise whether scenarios are genuinely challenging
or merely confirmatory of existing strategy.

Para. 28-30 — Financial Effects

Entities must disclose the current and anticipated effects of sustainability-related risks and opportunities
on financial position, performance, and cash flows. This is the critical 'connectivity' requirement linking
sustainability disclosures to the financial statements.

Financial Statement Line Possible Disclosure Example

Revenue USD 120m incremental revenue from green product
Opportunity: growing demand for low- line expected in FY2025
carbon products

Operating Costs EUR 45m estimated annual increase in energy costs

Risk: carbon pricing, energy cost inflation under carbon tax scenario
Assets 3 manufacturing facilities (carrying value USD 380m)
Risk: physical asset impairment from located in high flood-risk zones
flooding

Liabilities Provisions of USD 22m recognised; contingent

Risk: litigation from environmental damage liabilities of USD 100m disclosed

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Cash Flows USD 500m green bond issued at 25bps below

Opportunity: green financing at lower cost conventional financing cost

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3C. Risk Management (Paragraphs 31-33)

Risk management disclosures explain the processes used to identify, assess, prioritise, and monitor
sustainability-related risks and opportunities, and how these are integrated into the entity's overall risk
management framework.

Paragraph Example / Critical Issue

Para. 31(a) Annual enterprise risk assessment incorporating
Describe processes for identifying and ESG heat maps; third-party climate risk modelling
assessing sustainability-related risks using IPCC scenarios
Para. 31(b) Risk scored on a 5x5 likelihood/impact matrix;
Describe how risks are prioritised relative to climate physical risks now ranked #2 in the group's
other risks top-10 risk register
Para. 31(c) Monthly dashboard reviewed by Group Risk
Describe processes for monitoring Committee; real-time environmental compliance
sustainability-related risks monitoring at all 22 sites
Para. 32 Sustainability risk embedded in quarterly ERM
Explain how risk management processes review; same weighting as financial and operational
are integrated into overall risk management risks
Para. 33 Emerging technology screening process; innovation
Describe processes for identifying, lab identifies low-carbon opportunities with >15%
assessing, and prioritising opportunities IRR threshold

Critical Issue — Integration vs. Standalone

A common gap is entities describing a separate 'sustainability risk process' that operates in
isolation from the core ERM framework. IFRS S1 requires entities to demonstrate genuine
integration — the same risk taxonomy, the same escalation processes, and the same reporting
lines as financial and operational risks. Auditors and investors will probe whether ESG risks truly
sit alongside, or are merely an appendage to, core risk management.

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3D. Metrics and Targets (Paragraphs 34-44)

Entities must disclose metrics used to measure and manage sustainability-related risks and
opportunities, and any targets set to achieve sustainability-related goals.

Para. 34-37 — Metrics

Entities must disclose metrics in three categories:
• Industry-based metrics — metrics prescribed by ISSB industry standards (if applicable) or
derived from SASB Standards
• Entity-specific metrics — custom metrics the entity uses to measure material risks or
opportunities not covered by industry standards
• Cross-industry metric categories — including GHG emissions, transition risks, physical risks,
capital deployment, and internal carbon prices (required under IFRS S2 for climate)

Example — Metrics Disclosure Table

RetailCo discloses: (1) Scope 1 emissions: 85,000 tCO2e (FY2024, verified by third party); (2)
Scope 2 emissions (market-based): 42,000 tCO2e; (3) Water withdrawal intensity: 3.2 litres/unit
sold; (4) Employee turnover rate: 22% (industry metric under SASB Multiline & Specialty
Retailers); (5) Percentage of suppliers assessed for sustainability risks: 68%; (6) Revenue from
sustainable product lines: USD 450m (22% of total revenue).

Para. 38-44 — Targets

Entities must disclose targets set to monitor progress in addressing sustainability-related risks and
opportunities. For each target, entities must disclose:
• The metric used to set and monitor the target
• The objective of the target (e.g. mitigate risk, capture opportunity)
• The part of the entity to which the target applies
• The period over which the target applies
• The base period from which progress is measured
• Interim milestones
• Performance against each target

Target Element Example

Metric Absolute Scope 1+2 GHG emissions (tCO2e)
The metric used to measure progress

Objective Align with Paris Agreement 1.5°C pathway; manage

Why the target was set carbon pricing risk
Scope All wholly owned operations globally (excludes joint
Part of entity covered ventures < 50%)
Period Base year: 2019; Target year: 2035
Start and end dates

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Milestones 2025: -25%; 2030: -50%; 2035: -75% vs. 2019

Interim checkpoints baseline
FY2024 Performance Emissions: 185,000 tCO2e — reduction of 18% vs.
Actual result vs. target 2019 (on track for 2025 milestone)
Methodology GHG Protocol Corporate Standard; verified by
How measured and verified Bureau Veritas (limited assurance)

Critical Issue — Use of Offsets

IFRS S1 requires entities to separately disclose the extent to which targets rely on carbon
offsets, renewable energy certificates (RECs), or other instruments. Entities cannot simply net
offsets against emissions to reach a target without disclosure. Example: If BioFuel Co's Net Zero
target relies on 40% purchased offsets, this must be explicitly stated, along with the quality,
permanence, and additionality of those offsets. Failure to disclose reliance on offsets is a
significant greenwashing risk.

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4. Materiality (Paragraphs 8–13)

Materiality is the fundamental filter for IFRS S1 disclosures. An entity is only required to disclose
information about sustainability-related risks and opportunities that are material.

Definition of Materiality (Para. 9)

Information is material if omitting, misstating, or obscuring it could reasonably be expected to
influence decisions that primary users of general purpose financial reports make on the basis of
those reports.

4.1 Financial Materiality (Single Materiality)

IFRS S1 uses a financial materiality concept — also called 'single materiality'. Information is material if
it affects the entity's financial position, performance, cash flows, or access to finance. This contrasts
with 'double materiality' used by ESRS (EU framework), which also requires disclosure of the entity's
impacts on society and the environment regardless of financial effect.

Critical Issue — Double Materiality vs. Single Materiality

IFRS S1 (ISSB) applies single (financial) materiality ONLY. The European Sustainability
Reporting Standards (ESRS) require double materiality, meaning EU-listed companies must also
report on their impacts on people and planet. Companies reporting under both frameworks must
carefully identify which information satisfies which materiality test. Many items will satisfy both,
but some disclosures required by ESRS (impact materiality) are not required by IFRS S1.

4.2 Materiality Assessment Process

While IFRS S1 does not prescribe a specific method, best practice involves:
• Identifying the universe of potential sustainability-related risks and opportunities (using SASB
Standards, TCFD, ISSB guidance)
• Assessing each item against a materiality threshold: likelihood of occurrence AND magnitude of
financial effect
• Consulting with relevant internal stakeholders (CFO, Risk Committee, operations)
• Considering primary users' perspective — what would a reasonable investor want to know?
• Documenting the process and rationale for items excluded as immaterial

Example — Materiality Assessment

BankGroup runs a materiality assessment across 45 potential ESG topics. Of these, 12 are
assessed as material: credit risk from climate-exposed loan portfolios (HIGH), operational risk
from data centre energy costs (MEDIUM), regulatory risk from evolving ESG disclosure
requirements (HIGH), talent risk from DEI performance (MEDIUM), and 8 others. Social issues
such as community investment programmes are assessed as immaterial to financial
performance for BankGroup's investor base and are excluded from IFRS S1 disclosures (though
disclosed separately in the Sustainability Report for stakeholder purposes).

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5. Connected Information (Para. 20, 22, 56-59)

A defining feature of IFRS S1 is the requirement for connectivity — sustainability disclosures must be
clearly connected to the financial statements and to each other across the four content pillars.

5.1 What Connectivity Means in Practice

• Figures in sustainability disclosures must reconcile with audited financial statements
• CapEx allocated to sustainability transitions must be traceable to the balance sheet
• Revenue from sustainable products must be reconcilable to segment reporting
• Cross-references between sustainability report and financial statements are expected
• The same timeframe definitions used in financial statements should apply in sustainability
disclosures

Example — Connectivity Disclosure

GreenBuild PLC discloses that sustainability-related CapEx in FY2024 totalled GBP 85 million
(referenced to Note 12 — Property, Plant and Equipment in the Annual Report). Of this, GBP
60m related to installation of solar panels at 15 manufacturing sites (reducing Scope 2 emissions
by an estimated 18,000 tCO2e annually) and GBP 25m to EV fleet conversion. Both items are
also reflected in the Capital Allocation Strategy section of the Strategic Report and in the Risk
Management Committee's FY2024 minutes. These figures are consistent with audited financial
statements and have been subject to the same internal controls.

Critical Issue — Connectivity Failures

A common deficiency is where sustainability reports reference 'significant investment in
sustainability' but no corresponding CapEx is identifiable in the financial statements. This
disconnect raises questions about the credibility and auditability of sustainability disclosures and
is a primary focus of assurance providers and regulators.

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6. Fair Presentation, Errors & Comparative Information

6.1 Fair Presentation (Para. 50-55)

Sustainability-related financial disclosures must present a true and fair view of the entity's sustainability-
related risks and opportunities. This requires:
• Complete — covering all material risks and opportunities, including unfavourable information
• Neutral — free from bias; not selectively presenting only positive sustainability performance
• Accurate — disclosures are verifiable and based on robust data
• Clear — understandable to primary users (sophisticated investors, not general public)

Critical Issue — Cherry-Picking

Entities must not only disclose sustainability successes. If an entity has set a target that it is
failing to meet, this must be disclosed. If a risk has materialised and caused financial loss, this
must be disclosed. Selective presentation of only positive metrics while omitting negative
performance is a red flag for regulators and auditors, constituting a departure from the neutrality
requirement.

6.2 Comparative Information (Para. 56-58)

IFRS S1 generally requires entities to provide comparative information for at least the preceding period.
However, transition relief allows entities in the first year of adoption to omit comparative figures if not
practicable.
• Critical Issue: Restatement — If prior year figures are restated (e.g. revised GHG calculation
methodology), entities must disclose the reason and the restated figures.
• Critical Issue: Data availability — For Scope 3 GHG emissions in particular, prior-year
comparative data is often unavailable. Entities must disclose this limitation and outline a
roadmap for providing comparatives.

Example — Comparative Disclosure with Restatement

PetroCo restated its FY2022 Scope 1 emissions from 520,000 tCO2e to 548,000 tCO2e
following a methodology revision aligned with GHG Protocol. FY2023 and FY2024 figures have
been prepared on the revised basis. The restatement arose from the correction of an error in
emission factors applied to natural gas combustion at the Lagos refinery. The impact of the
restatement is a 5.4% increase in reported FY2022 Scope 1 emissions. No other periods were
affected.

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7. Transition Provisions (Paragraphs E1–E8)

The ISSB provided several transition reliefs to allow entities time to build systems and processes for
IFRS S1 compliance. These are critical for first-year adopters.

Relief Expiry / Condition

Relief 1 — Timing First year only; concurrent reporting required from
Entities may publish their sustainability Year 2
disclosures after financial statements in first
year of application

Relief 2 — Comparatives First year only; comparatives required from Year 2

Entities need not provide comparative IFRS
S1 disclosures for the preceding period in
the first year

Relief 3 — Scope 3 GHG First year only; Scope 3 required from Year 2
Entities may omit Scope 3 GHG emission
disclosures (required by IFRS S2) in the first
year

Relief 4 — Other ISSB Standards Until respective standard becomes effective

Where another ISSB standard has been
issued but not yet effective, entities need
not apply it early

Relief 5 — Sources of Guidance First year only; strongly encouraged from Year 2
Entities not applying IFRS S2 need not use
specific SASB/TCFD frameworks in first
year

Critical Issue — Relief Does Not Mean Exemption from Strategy Disclosures
The transition reliefs apply to specific disclosure elements only. Even in Year 1, entities must still
comply with the FULL governance, strategy (including financial effects), and risk management
content requirements. The reliefs primarily cover comparatives, Scope 3, and timing. Entities that
interpret the transition reliefs broadly as a general exemption from IFRS S1 compliance risk
regulatory enforcement.

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8. Sources of Guidance (Para. 54–56)

When IFRS S1 or another ISSB standard does not specifically address a sustainability-related risk or
opportunity, entities must exercise judgement and may refer to other frameworks as sources of
guidance.

8.1 Hierarchy of Guidance Sources

Entities must apply the following hierarchy:
• First: Requirements in IFRS Sustainability Disclosure Standards (IFRS S1, IFRS S2, and future
ISSB standards)
• Second: SASB Standards (industry-specific metrics)
• Third: CDSB Framework; TCFD Recommendations; Global Reporting Initiative (GRI) Standards
• Fourth: Other frameworks consistent with IFRS S1's objective (e.g. ISO standards, sector-
specific frameworks)

Critical Issue — SASB Standards

SASB produces 77 industry-specific standards with tailored metrics. IFRS S1 strongly
encourages use of SASB industry metrics as the basis for industry-specific disclosures. For
example, a financial services entity would use SASB's Commercial Banks standard, which
includes metrics on financed emissions, data security incidents, and employee diversity. Entities
should identify the most relevant SASB standard(s) for their industry. Some entities span
multiple SASB industries and must apply multiple standards.

8.2 TCFD Framework Alignment

IFRS S1's four-pillar structure directly mirrors the TCFD framework. Entities that have been reporting
under TCFD for several years will find significant overlap. However, IFRS S1 is more prescriptive in
certain areas (e.g. requiring disclosure of entity-specific metrics even where SASB metrics exist;
requiring cross-industry metric categories for climate under IFRS S2).

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9. Assurance and Verification

IFRS S1 does not itself mandate external assurance of sustainability disclosures. However, assurance
is increasingly required by jurisdictions and expected by investors.

9.1 Types of Assurance

Type Typical Use
Limited Assurance First-year adopters; GHG emissions; qualitative
Negative form: 'Nothing came to our disclosures
attention' — lower bar

Reasonable Assurance Mature reporters; financial metrics; regulatory

Positive form: 'In our opinion the disclosures requirements
are fairly stated' — higher bar

Internal Assurance Pre-cursor to external assurance; governance

Management attestation; internal audit controls testing
review

Critical Issue — Data Quality

The biggest challenge for external assurance of IFRS S1 disclosures is data quality. Many
sustainability metrics (especially Scope 3 GHG emissions, water usage, biodiversity impacts)
lack the same rigour as financial data. Entities must invest in data governance — clearly defined
metrics, consistent measurement methodologies, documented assumptions, and audit trails —
before external assurance is meaningful.

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10. Critical Issues Summary — Top 10 Pitfalls

The following table summarises the most critical issues entities face when implementing IFRS S1:

# Mitigation / Best Practice

1 Name the specific body/individual; describe meeting
Vague governance disclosures — no frequency and escalation protocols
names, no frequency, no process

2 Conduct formal, documented materiality assessment

Materiality assessment is undocumented or using SASB/TCFD/GRI universe; retain evidence
too narrow

3 Implement cross-reference protocol; reconcile

Disconnection between sustainability sustainability CapEx to audited financials
disclosures and financial statements

4 Disclose all material risks; include missed targets;

Cherry-picking — only positive performance apply neutrality principle
disclosed

5 Use at least 2 scenarios including a

Single optimistic scenario in resilience severe/challenging one; justify scenario selection
analysis

6 Understand IFRS S1 = financial materiality only;

Misapplying double materiality instead of separate ESRS-required impact disclosures
single (financial) materiality

7 Define short/medium/long term explicitly; apply

Inconsistent timeframe definitions across consistently year-on-year
reports

8 Disclose offset reliance explicitly; include offset

Overreliance on carbon offsets in targets quality/vintage/certification details
without disclosure

9 Build Scope 3 data systems in Year 1; aim for full

Scope 3 GHG omissions beyond Year 1 Scope 3 disclosure by Year 2
transition relief

10 Ensure sustainability risks are on the main risk

Sustainability risk process not integrated register; same escalation, same governance
into ERM

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11. Illustrative Complete IFRS S1 Disclosure — GlobalBank PLC

The following illustrates a substantially complete IFRS S1 disclosure for a hypothetical bank,
GlobalBank PLC, covering all four content pillars for one material sustainability-related risk: Climate
Transition Risk.

GOVERNANCE
The Board's Risk Oversight Committee (ROC), comprising 6 independent non-executive
directors (2 with climate finance expertise), reviews climate-related risks and opportunities
quarterly. The Group Chief Risk Officer (GCRO) reports to the ROC on all material climate risks.
The GCRO chairs the Climate Risk Steering Group (CRSG), which meets monthly and includes
representatives from Credit Risk, Treasury, Strategy, and Compliance. In FY2024, the Board
approved GlobalBank's Climate Strategy 2030, allocating USD 5 billion in sustainable finance
commitments and tying 20% of executive long-term incentive pay to achieving financed
emissions reduction milestones.

STRATEGY
Material Risk: Climate Transition Risk (Medium-term: 3-7 years). The shift to a low-carbon
economy poses transition risks including: (1) credit losses from exposures to carbon-intensive
sectors (energy, materials, transport — combined loan book exposure of USD 42 billion, 18% of
total loans); (2) regulatory risk from evolving climate disclosure and capital requirements; and (3)
reputational risk from financing high-emitting industries. Scenario analysis was conducted using
IEA NZE 2050 and IEA STEPS scenarios. Under NZE 2050, the estimated credit impairment
impact on the carbon-intensive loan portfolio is USD 2.1 billion over 7 years (manageable within
current provisioning). Under STEPS (delayed transition), credit impairment risk rises to USD 4.8
billion. GlobalBank's strategy response includes: (a) phased withdrawal from thermal coal
financing by 2030; (b) a USD 5bn green and sustainability-linked lending target by 2027; (c)
mandatory climate risk assessment for all loans >USD 10m to carbon-intensive sectors. These
strategic actions are expected to reduce transition risk exposure by 40% by 2027.

RISK MANAGEMENT
GlobalBank identifies climate transition risks through its Enterprise Risk Management (ERM)
framework, incorporating climate as a distinct risk class alongside credit, market, and operational
risk. Risk identification uses TCFD scenario pathways, NGFS scenarios, and proprietary climate
risk modelling developed with external climate scientists. All credit facilities to carbon-intensive
industries are assessed using a Climate Risk Score (CRS) tool, which models carbon pricing
sensitivity, regulatory exposure, and transition pathway alignment. Risks scoring 'High' on the
CRS require GCRO approval. The Climate Risk Register is reviewed monthly by the CRSG and
quarterly by the ROC. Opportunities (e.g. green financing demand) are assessed through the
annual Strategic Planning process.

METRICS & TARGETS

Metrics: (1) Financed Scope 3 (Category 15) emissions attributable to loan portfolio: 48.5
MtCO2e (FY2024, PCAF methodology, limited assurance by Deloitte); (2) Sustainable finance
commitments: USD 1.8bn originated in FY2024; (3) % of loan book with climate risk assessment:

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94% (by value); (4) Coal exposure: USD 2.1bn (2.1% of total), reduced from USD 3.8bn in
FY2022. Targets: GlobalBank has committed to achieving Net Zero financed emissions by 2050
(aligned to IEA NZE 2050 pathway). Interim targets: 2030: 50% reduction in financed emissions
intensity (per USD million lent) vs. 2020 baseline; 2025: Exit all direct thermal coal financing.
FY2024 performance: Financed emissions intensity: -18% vs. 2020 (on track). Reliance on
carbon offsets: NONE — all reductions are operational or reflect portfolio reallocation.

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Appendix — Key IFRS S1 Paragraph Reference Table

Paragraph(s) Key Action Required

1-2 Understand overarching requirements
Objective & Overview

3-7 Confirm jurisdiction applicability; set reporting

Scope & Boundary boundary
8-13 Conduct documented materiality assessment
Materiality

14-19 Identify board/management oversight; describe

Governance processes
20-30 Describe risks/opportunities; scenario analysis;
Strategy financial effects
31-33 Integrate ESG into ERM; disclose identification,
Risk Management assessment, monitoring
34-44 Disclose metrics and quantified targets with
Metrics & Targets performance
45-49 Apply SASB, TCFD, GRI where IFRS S standards
Sources of Guidance don't exist
50-55 Apply completeness, neutrality, accuracy
Fair Presentation

56-58 Provide prior-year comparatives (relief in Year 1)

Comparatives

59-65 Sustainability disclosures form part of general

Location purpose financial reports
E1-E8 Apply first-year reliefs where needed; plan for Year 2
Transition Reliefs full compliance

This document provides a comprehensive line-by-line educational guide to IFRS S1. It does not
constitute professional advice. Entities should consult their auditors and legal advisers when
implementing IFRS S1.

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