Quick Answer — IFRS S1 & S2 UK Status
What is the ISSB?
The International Sustainability Standards Board (ISSB)3 was established by the IFRS Foundation at COP26 in November 2021.
Mandate: Create a global baseline of sustainability disclosure standards that provide investors with information about companies' sustainability-related risks and opportunities.
Built on existing frameworks: IFRS S1 and S2 consolidate and build upon the Task Force on Climate-related Financial Disclosures (TCFD), Sustainability Accounting Standards Board (SASB), and Integrated Reporting frameworks1.
Global coordination: Designed to work alongside jurisdiction-specific requirements like ESRS in the EU and UK SRS in the UK.
IFRS S1 Explained
Full title: General Requirements for Disclosure of Sustainability-related Financial Information1
Purpose: Cross-cutting framework that establishes the foundation for all sustainability-related disclosures. Sets out general requirements that apply alongside topic-specific standards (like IFRS S2 for climate).
Core requirements:
- Materiality assessment based on enterprise value to primary users (investors, lenders, creditors)
- Four-pillar disclosure architecture: governance, strategy, risk management, metrics and targets
- Reporting boundary aligned with financial statements
- Annual reporting frequency with interim updates where material changes occur
Industry guidance: Permits reference to SASB Standards and other authoritative sources for industry-specific metrics1.
IFRS S2 Explained
Full title: Climate-related Disclosures1
Purpose: Requires disclosure of climate-related risks and opportunities that could reasonably be expected to affect an entity's cash flows, access to finance, or cost of capital.
Built on TCFD: Adopts the TCFD four-pillar framework but makes scenario analysis mandatory (not just recommended) and requires Scope 1, 2, and 3 emissions disclosure1.
Key requirements:
- Governance: Climate oversight by board and management
- Strategy: Climate risks and opportunities assessment, scenario analysis
- Risk management: Climate risk identification, assessment, and management processes
- Metrics and targets: GHG emissions (Scopes 1, 2, 3), climate-related targets, and financial impacts
Scenario analysis: Must use scenarios consistent with latest international agreement on climate change (Paris Agreement 1.5°C goal)1.
Is IFRS S1 and S2 Mandatory in the UK?
Direct answer: NO — IFRS S1 and S2 are not directly mandatory in the UK.
UK adoption route: The UK government has adopted IFRS S1 and S2 as the basis for UK SRS S1 and UK SRS S22, published by DBT on 25 February 20262.
UK mandatory scope: UK SRS S2 is proposed mandatory for approximately 515 premium-listed companies from financial years beginning 1 January 2027, subject to FCA Policy Statement (expected autumn 2026).
Key difference: UK SRS = IFRS S1 and S2 + six UK-specific amendments (see below).
Six UK Amendments (Difference Between IFRS and UK SRS)
UK SRS adopts IFRS S1 and S2 as the baseline but includes six UK-specific amendments verified by leading law firms2:
| Amendment | IFRS S1/S2 | UK SRS S1/S2 |
|---|---|---|
| S1 first-year relief | Available | Removed |
| Climate-first relief | 1-year transition | Reworked (2-year relief) |
| SASB requirements | Shall refer to | May refer to |
| GICS classification | Required | Removed |
| Financial connectivity | Standard requirement | Enhanced (paragraph B59A) |
| Effective dates | Global dates | UK effective dates removed |
These amendments tailor IFRS S1 and S2 to UK legal and regulatory context while maintaining international consistency2.
Global Adoption Status
As of March 2025, 15 jurisdictions have adopted IFRS S1/S2 on voluntary or mandatory basis, with 21 others planning adoption4. Jurisdictions adopting represent over 50% of global GDP4.
Key jurisdictions
UK: Via UK SRS S1/S2 with amendments, proposed mandatory 20272
Australia: AASB S1 and S2 adopted with Australian modifications. Phased mandate: Group 1 entities from FY2024-25, Group 2 from FY2026-27, Group 3 from FY2027-284.
Japan: SSBJ issued three sustainability standards on 5 March 2025, aligned with ISSB standards but split S1 into separate General and Application standards4.
Singapore: SGX mandated ISSB-aligned climate reporting for all listed companies. MAS incorporated ISSB expectations for financial institutions4.
Other adopters: Hong Kong, Malaysia, Brazil, Nigeria, and California have announced alignment or consultations4.
IFRS S1/S2 vs ESRS vs UK SRS
| Framework | Authority | Scope | Materiality | Status |
|---|---|---|---|---|
| IFRS S1/S2 | ISSB / IFRS Foundation | Global baseline | Single (enterprise value) | Global standard |
| UK SRS S1/S2 | DBT / FCA | UK listed companies | Single (enterprise value) | UK adoption with 6 amendments |
| ESRS (CSRD) | European Commission | EU companies >1,000 employees | Double (financial + impact) | EU mandatory from 2024 |
| TCFD | FSB | G20 voluntary | Financial materiality | Being superseded by IFRS S2 |
This shows IFRS S1/S2 as the emerging global baseline, with UK and EU adopting jurisdiction-specific versions while maintaining core alignment.
What are IFRS S1 and S2?
IFRS S1 (General Requirements) and S2 (Climate-related Disclosures) are global sustainability disclosure standards issued by the ISSB on 26 June 2023. S1 provides the foundation framework, while S2 covers climate-specific requirements including scenario analysis and Scope 1, 2, 3 emissions.
Is IFRS S1 and S2 mandatory in the UK?
Not directly. The UK has adopted IFRS S1 and S2 as UK SRS S1 and S2 with six UK-specific amendments. UK SRS S2 is proposed mandatory for ~515 premium-listed companies from 1 January 2027 under FCA CP26/5.
Who issues IFRS S1 and S2?
The International Sustainability Standards Board (ISSB), established by the IFRS Foundation at COP26 in November 2021. The ISSB creates global sustainability disclosure standards to provide investors with consistent information.
What is the difference between IFRS and UK SRS?
UK SRS adopts IFRS S1 and S2 as the baseline but includes six amendments: removes S1 first-year relief, reworks climate-first relief, softens SASB requirements from "shall" to "may", removes GICS classification, adds financial connectivity provisions, and removes global effective dates.
Are IFRS S1 and S2 mandatory anywhere?
Yes, 15+ jurisdictions have adopted them as mandatory or voluntary standards as of March 2025. Australia uses AASB S1/S2 with phased mandates from 2024. Singapore mandated ISSB-aligned reporting for all listed companies. UK proposes mandatory from 2027 via UK SRS.
How does IFRS S2 compare to TCFD?
IFRS S2 builds on TCFD's four-pillar framework but makes scenario analysis mandatory (not recommended), requires Scope 3 emissions disclosure, and provides more detailed requirements. TCFD is being superseded by IFRS S2 and jurisdiction-specific adoptions like UK SRS S2.