ISSB IFRS S1 General Requirements 1 — Questions and Answers
Question 1: What is the primary objective of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information?
- To require entities to disclose information about sustainability-related risks and opportunities material to investors (Correct answer)
- To mandate carbon neutrality for all listed companies
- To replace traditional financial statements with sustainability reports
- To standardize ESG ratings across global markets
Correct answer: To require entities to disclose information about sustainability-related risks and opportunities material to investors
IFRS S1 requires entities to disclose sustainability-related risks and opportunities that could affect their cash flows, financing access, or cost of capital.
Question 2: Under IFRS S1, what are the four core content pillars that sustainability-related financial disclosures must address?
- Governance, Strategy, Risk Management, and Metrics & Targets (Correct answer)
- Environment, Social, Governance, and Reporting
- Climate, Water, Biodiversity, and Human Rights
- Leadership, Operations, Supply Chain, and Products
Correct answer: Governance, Strategy, Risk Management, and Metrics & Targets
IFRS S1 is structured around Governance, Strategy, Risk Management, and Metrics & Targets — the same four pillars as the TCFD framework.
Question 3: Which concept does IFRS S1 use to determine what sustainability information must be disclosed?
- Materiality — information material to primary users of general purpose financial reports (Correct answer)
- Double materiality — impacts on both society and the entity
- Financial-only materiality based on net income thresholds
- Sector-specific relevance scores
Correct answer: Materiality — information material to primary users of general purpose financial reports
IFRS S1 applies investor-focused materiality, meaning information is material if omitting it could influence decisions of primary users of general purpose financial reports.
Question 4: Under IFRS S1, what is the required timing for sustainability disclosures relative to financial statements?
- At the same time as the related financial statements (Correct answer)
- Within 90 days after the financial year-end
- Annually but no specific timing relative to financial statements
- Quarterly alongside interim financial reports
Correct answer: At the same time as the related financial statements
IFRS S1 requires sustainability disclosures to be released at the same time as the related financial statements to ensure consistency.
Question 5: What does IFRS S1 require entities to disclose about their use of scenario analysis?
- Whether and how scenario analysis is used to assess resilience of business strategy to sustainability risks (Correct answer)
- The specific scenarios mandated by the ISSB for all industries
- Only quantitative scenario outputs expressed in monetary terms
- Scenario analysis is optional and no disclosure is required
Correct answer: Whether and how scenario analysis is used to assess resilience of business strategy to sustainability risks
IFRS S1 requires entities to disclose whether and how they use scenario analysis to assess resilience, allowing qualitative or quantitative approaches.
Question 6: Under IFRS S1, which industry-based disclosure requirements does the ISSB reference as a source of guidance?
- SASB Standards (now part of the IFRS Foundation) (Correct answer)
- GRI Universal Standards
- EU ESRS sector standards
- ISO 14001 environmental management requirements
Correct answer: SASB Standards (now part of the IFRS Foundation)
IFRS S1 explicitly references SASB Standards — which the IFRS Foundation now stewards — as a source of guidance for industry-specific metrics.
ISSB IFRS S1 General Requirements 1
What is the primary objective of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information?