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IFRS S1 Explained

Richard Clarke

A New Standard for Sustainability Reporting in Finance

The global landscape of corporate reporting is forever changing, and the release of IFRS S1 marks a significant milestone for sustainability reporting.

Issued in June 2023 by the International Sustainability Standards Board (ISSB), IFRS S1 ( or the General Requirements for Disclosure of Sustainability-related Financial Information) is the first globally recognised standard for sustainability disclosures.

This standard addresses the need for consistent and comparable sustainability information across industries and regions, which has long been a gap in corporate transparency.

Why IFRS S1 Matters for ACCA Students

Understanding IFRS S1 is vital not only for exam success, but also for contributing responsibly to your business environment. This standard highlights four key disclosure areas that are central to assessing sustainability in financial reporting:

  1. Governance – Companies must disclose the processes they use to oversee and manage sustainability risks and opportunities.

  2. Strategy – Businesses need to outline their strategy for addressing sustainability risks and how these affect short- and long-term objectives.

  3. Risk Management – IFRS S1 requires companies to report on how they identify, assess, and monitor sustainability-related risks.

  4. Metrics and Targets – Firms are required to disclose relevant metrics and progress towards their sustainability targets.

The Global Impact of IFRS

Developed as a global baseline, IFRS S1 aligns with existing frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) and draws from the Sustainability Accounting Standards Board (SASB) Standards.

With these foundational elements, IFRS S1 supports companies and investors in making better-informed decisions, benefiting stakeholders and capital markets alike.

For accounting students, this means getting familiar with a standard that promotes globally consistent and transparent reporting on sustainability risks—vital for applying to exam scenarios and real-world situations.

Which ACCA Papers Does This Apply To?

Knowledge of IFRS S1 and its sustainability reporting requirements is particularly valuable for the following ACCA papers:

  • Strategic Business Reporting (SBR): This paper focuses on financial reporting standards, including how to interpret and apply IFRS standards. 
    Understanding IFRS S1 here is critical for analysing and preparing sustainability-related disclosures, which are increasingly relevant in financial reporting.

  • Advanced Audit and Assurance (AAA): AAA includes evaluating an entity's risk management and governance—both of which are emphasised in IFRS S1. 
    This knowledge helps students understand the broader implications of sustainability on audits, including assessing sustainability-related disclosures.

  • Advanced Financial Management (AFM): AFM students must understand how sustainability-related risks impact financial management and investment decisions. 
    IFRS S1’s emphasis on risk management and strategy provides a framework for these considerations.

  • Strategic Business Leader (SBL): SBL covers corporate governance, strategic management, and the impact of business decisions on sustainability. 
    Knowledge of IFRS S1 is useful for analysng case studies on how sustainability affects strategy and governance.

Finally, as sustainability becomes more integrated into global reporting practices, familiarity with IFRS S1 is advantageous across multiple ACCA and CIMA papers, particularly in exam scenarios involving corporate accountability, stakeholder engagement, and long-term financial impacts.