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IFRS S1

General Requirements for Disclosure of Sustainability-related Financial Information

IFRS S1 sets out the overall requirements for 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 about providing resources to the entity, establishing the foundational disclosure framework the ISSB's topic-specific standards (such as IFRS S2) build upon. [S1]

Effective 2024-01-01Related: IFRS S2 · IAS 1 · IFRS 18 · IAS 8

Overview

IFRS S1 is the International Sustainability Standards Board's foundational, cross-cutting standard, requiring an entity to disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect its cash flows, access to finance, or cost of capital over the short, medium and long term. [S1] It organises disclosures around four content areas consistent with the Task Force on Climate-related Financial Disclosures (TCFD) framework: governance (oversight and management of sustainability-related risks and opportunities), strategy (how they affect the entity's business model, strategy and financial planning), risk management (processes to identify, assess, prioritise and monitor them), and metrics and targets (how performance is measured and monitored). [S2] IFRS S1 also requires 'connected information' — ensuring sustainability disclosures are linked coherently to related financial statement information, not prepared as a disconnected, standalone report.

Why it matters

IFRS S1 represents a fundamental shift from voluntary, often loosely governed corporate sustainability or ESG reporting to a disclosure regime built with the same rigour, connectedness to financial statements, and (where jurisdictions require it) assurance expectations as financial reporting itself. For any Nigerian company anticipating investor, lender or regulatory demand for credible sustainability information, IFRS S1 is rapidly becoming the reference framework multiple jurisdictions are building their own local sustainability disclosure requirements around, making early familiarity valuable even before mandatory adoption in a given market.

Scope

Applies to general purpose sustainability-related financial disclosures, and may be applied by an entity whether its related financial statements are prepared under IFRS Accounting Standards or another GAAP. It requires disclosure of information about sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects, using a materiality assessment that specifically references the entity's own facts and circumstances; sustainability-related risks and opportunities that could not reasonably be expected to affect assessments of enterprise value by primary users of general purpose financial reports fall outside the standard's disclosure requirement.

Key definitions

term
Sustainability-related risks and opportunities
definition
Risks and opportunities that could reasonably be expected to affect an entity's cash flows, access to finance, or cost of capital over the short, medium or long term, arising from the entity's dependence on, and effects on, people, the planet and the economy.
term
General purpose sustainability-related financial disclosures
definition
Disclosures about sustainability-related risks and opportunities that are useful to primary users of general purpose financial reports (existing and potential investors, lenders and other creditors) in making decisions about providing resources to the entity.
term
Connected information
definition
Information that enables users to understand the connections between sustainability-related risks and opportunities and other information in an entity's general purpose financial reports, including its related financial statements.
term
Value chain
definition
The full range of interactions, resources and relationships related to an entity's business model and the external environment in which it operates, including upstream and downstream activities.
term
Sustainability Accounting Standards Board (SASB) Standards
definition
Industry-based disclosure topic standards that IFRS S1 requires an entity to consider when identifying sustainability-related risks and opportunities specific to its industry.

Recognition

IFRS S1 does not use a 'recognition' concept in the accounting sense of recognising assets and liabilities; instead, it requires an entity to identify sustainability-related risks and opportunities reasonably expected to affect its prospects, applying a materiality assessment consistent with the concept of materiality used in IFRS Accounting Standards, and to determine which of those risks and opportunities warrant disclosure. An entity is required to refer to, and consider the applicability of, industry-based SASB disclosure topics in identifying sustainability-related risks and opportunities, and may additionally refer to other sources such as the CDSB Framework Application Guidance and other standard-setters' pronouncements designed to meet similar user information needs.

Initial measurement

Not applicable in the traditional accounting sense; IFRS S1 requires disclosure of quantitative and qualitative information about identified sustainability-related risks and opportunities, including, where practicable, an entity's assessment of their current and anticipated financial effects, using all reasonable and supportable information available at the reporting date without undue cost or effort, and disclosing the measurement approach, inputs and assumptions used, including any significant judgements and sources of uncertainty.

Subsequent measurement

Not applicable as a distinct concept; the ongoing discipline is updating the identification, assessment and disclosure of sustainability-related risks and opportunities each reporting period as circumstances, strategy, and available information evolve, consistent with the requirement that disclosures reflect an entity's current understanding of its material sustainability-related risks and opportunities rather than a static assessment carried forward unchanged.

Presentation

General purpose sustainability-related financial disclosures are required to be reported at the same time as the related general purpose financial statements, and for the same reporting entity, though IFRS S1 does not mandate a specific single physical location within a broader annual report, provided disclosures are presented in a manner that is clear and understandable and connected information can be identified. Comparative information is required for the preceding period, subject to specified transition reliefs, including a first-year transition relief permitting an entity to disclose only climate-related information (under IFRS S2) in its first year of applying the ISSB Standards, with full sustainability-related disclosure beginning in the second year.

Disclosure checklist

  • Governance: the governance body(s) or individuals responsible for oversight of sustainability-related risks and opportunities, and management's role in related processes, controls and procedures.
  • Strategy: the sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects, and their current and anticipated effects on the entity's business model, strategy and financial position, performance and cash flows.
  • Risk management: the processes used to identify, assess, prioritise and monitor sustainability-related risks and opportunities, and how those processes are integrated into the entity's overall risk management process.
  • Metrics and targets: the metrics used to measure and monitor sustainability-related risks and opportunities, including industry-specific metrics, and any targets set (and progress towards them).
  • Connected information showing the relationship between sustainability-related disclosures and information in the entity's related financial statements.
  • Significant judgements made in preparing the disclosures, including in identifying material sustainability-related risks and opportunities and in measuring their anticipated effects.

Practical treatment

The practical starting discipline is a genuine, entity-specific materiality assessment: IFRS S1 does not require boilerplate disclosure against every conceivable sustainability topic, but does require the entity to consider all sustainability-related risks and opportunities that could reasonably be expected to affect its prospects, using industry-based SASB disclosure topics as a required reference point even where the entity ultimately concludes some topics are not applicable to its specific activities. Building genuine 'connected information' linking sustainability disclosures to the financial statements (rather than producing two separate, disconnected reports) is one of the more demanding practical requirements, particularly for entities used to treating sustainability reporting as a marketing or stakeholder-relations exercise rather than a rigorous, assurance-ready disclosure discipline. See nigeria_notes for FRCN's specific adoption roadmap for Nigeria.

Common mistakes

  • Treating IFRS S1 disclosure as a repackaging of an existing voluntary ESG or corporate social responsibility report, rather than a genuine, entity-specific materiality-driven disclosure exercise connected to the financial statements.
  • Failing to reference and consider the applicability of industry-based SASB disclosure topics when identifying sustainability-related risks and opportunities.
  • Producing sustainability disclosures as a standalone document disconnected from the financial statements, without the required 'connected information' linking the two.
  • Applying the same generic disclosure content across all entities in a group without an entity-specific materiality assessment for each reporting entity.
  • Overlooking the specific transition relief permitting climate-only disclosure (IFRS S2) in the first year of adoption, either by not using it when it would ease a difficult first-year transition, or by misunderstanding its scope and limits.

CFO checklist

  • Establish or confirm the governance body responsible for oversight of sustainability-related risks and opportunities, and document management's role in related processes.
  • Perform a genuine, entity-specific materiality assessment referencing applicable SASB industry disclosure topics, rather than adopting generic disclosure content.
  • Build a process connecting sustainability-related disclosures to the entity's financial statements, evidencing the required 'connected information'.
  • Assess whether to use the first-year transition relief permitting climate-only (IFRS S2) disclosure before full IFRS S1 disclosure in the second year.
  • Monitor FRCN's Nigeria-specific adoption roadmap and readiness requirements for the IFRS Sustainability Disclosure Standards.
  • Coordinate sustainability disclosure preparation timelines with the entity's ordinary financial statement reporting cycle, since both must be reported together.

FAQs

q
Do we need to disclose information about every possible sustainability topic under IFRS S1?
a
No. IFRS S1 requires disclosure of information about sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects, based on a genuine, entity-specific materiality assessment; it does not require boilerplate disclosure against every conceivable topic, though the entity must still consider (and document its consideration of) applicable industry-based SASB disclosure topics.
q
Can we present our sustainability disclosures as a completely separate report from our financial statements?
a
IFRS S1 requires sustainability-related financial disclosures to be reported at the same time as related financial statements and to include 'connected information' linking the two; while it does not mandate a single physical document, the disclosures cannot be prepared as a disconnected exercise unrelated to the financial statements.
q
In our first year of applying IFRS S1, do we need to disclose all sustainability topics or just climate?
a
IFRS S1 (and IFRS S2 together) include a transition relief permitting an entity to disclose only climate-related risks and opportunities (under IFRS S2) in its first year of applying the ISSB Standards, with disclosure of all material sustainability-related risks and opportunities beginning in the second year of adoption.

Nigeria application notes

Regulatory overlay

IFRS S1 falls within the FRCN's overarching mandate under the FRCN Act 2011 to promote compliance with IASB- and, by extension, ISSB-developed standards in Nigeria. [S3] Unlike most other standards covered in this Knowledge Centre, Nigeria has an active, published, standard-specific adoption process for the IFRS Sustainability Disclosure Standards: the FRCN released a Roadmap Report for the Adoption of IFRS Sustainability Disclosure Standards in Nigeria in April 2024, subsequently amended in an updated 2026 version, setting out a phased adoption timeline and readiness expectations for Nigerian reporting entities. [S4][S5]

Tax interaction (Nigeria)

IFRS S1 disclosure requirements do not directly affect a Nigerian entity's companies income tax computation, which continues to be based on taxable profit determined under the Nigeria Tax Act 2025 at the standard illustrative rate of 30% (subject to the small-company exemption and other qualifying conditions); however, sustainability-related tax incentives or levies that may emerge under Nigerian policy (for example, environmental remediation fund contributions referenced elsewhere in the tax reform) could themselves become material sustainability-related financial information requiring IFRS S1 disclosure once identified as such through the entity's materiality assessment. [S_TAX1][S_TAX2] Nigerian rates, thresholds, exemptions, incentives and filing rules referenced in this file (including CIT, VAT, sector-specific regulatory requirements, and the small-company threshold) should be independently verified against the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, FRCN/NERC/sector-regulator guidance, and current NRS practice at the reporting or filing date, since thresholds, rates and reliefs are subject to periodic revision and to sector- or entity-specific qualifying conditions. This file does not constitute legal or tax advice. [S_TAX1][S_TAX2]

FX considerations

For Nigerian entities with material exposure to naira volatility, currency risk itself may constitute a sustainability-related (specifically, economic and financial system) risk factor relevant to an entity's own IFRS S1 materiality assessment where it interacts with broader sustainability-related dependencies (for example, foreign-currency-denominated financing for climate adaptation or transition investments); where sustainability-related financial effects are quantified in naira but reference foreign-currency-denominated costs or investments, the translation basis used should be disclosed consistently with the entity's ordinary IAS 21 policy.

SME practical note

IFRS S1 is currently most relevant to larger Nigerian public interest entities and NGX-listed companies within the scope of FRCN's phased adoption roadmap, rather than to Outliers' typical standalone SME clients; however, Outliers recommends that SME clients supplying larger, IFRS-S1-reporting Nigerian or multinational customers begin anticipating value-chain sustainability data requests, since IFRS S1's value chain disclosure concept means upstream suppliers are increasingly likely to be asked for sustainability-related information by their larger customers even before they themselves are directly required to report under the Standard.

Common Nigerian pitfalls

  • Assuming FRCN's IFRS Sustainability Disclosure Standards roadmap applies uniformly to all Nigerian entities without checking the specific phase, threshold, and deadline applicable to the entity in question.
  • Treating an existing corporate social responsibility or ESG report as already IFRS S1-compliant without a genuine gap analysis against the Standard's specific requirements.
  • Missing the FRCN Adoption Readiness Working Group process stages (gap analysis, board resolution, implementation plan) ahead of the applicable roadmap deadline.
  • Overlooking value-chain sustainability data requests from larger IFRS-S1-reporting customers as an early practical signal of the Standard's reach, even for smaller Nigerian suppliers not yet directly in scope.

FRC pronouncements

The FRCN has established an Adoption Readiness Working Group (ARWG) process for the IFRS Sustainability Disclosure Standards, requiring affected entities to progress through defined readiness stages (including gap analysis, board-level resolution, and implementation planning) ahead of each phase of the roadmap; this is a genuine, standard-specific FRCN pronouncement and process, distinct from the general 'no FRCN pronouncement identified' position noted for most other Standards in this Knowledge Centre, and should be monitored directly for the current phase and deadline applicable to any specific Nigerian entity. [S4][S5]

Worked examples

Identifying a material sustainability-related risk using SASB disclosure topics

A Nigerian food and beverage manufacturer, applying IFRS S1 for the first time, reviews the SASB industry-specific disclosure topics for its sector and identifies water management and supply chain resilience (given its reliance on agricultural inputs vulnerable to erratic rainfall patterns) as topics that could reasonably be expected to affect its prospects, while concluding several other SASB topics for unrelated sub-industries are not applicable to its activities.

Facts

Workings

The entity documents its consideration of each applicable SASB disclosure topic, concluding which are material to its own facts and circumstances (water management and supply chain resilience) and which are not, consistent with IFRS S1's requirement to consider (not necessarily adopt in full) industry-based disclosure topics.

Applying the first-year transition relief (climate-only disclosure)

A Nigerian company adopting the IFRS Sustainability Disclosure Standards for the first time elects to apply the transition relief permitting it to disclose only climate-related risks and opportunities under IFRS S2 in its first year, deferring full IFRS S1 disclosure of all material sustainability-related risks and opportunities to its second year of adoption.

Facts

Workings

In year one, the entity's sustainability-related financial disclosures focus specifically on climate-related risks and opportunities under IFRS S2 (which itself still requires application of IFRS S1's general governance, strategy, risk management, and metrics/targets framework, but applied to climate matters specifically).

In year two, the entity expands its disclosures to cover the full range of material sustainability-related risks and opportunities identified under IFRS S1, not limited to climate.

Sources & citations

  1. [S1]IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information — IFRS Foundationaccessed 2026-07-18
  2. [S2]ISSB issues IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures — BDO Globalaccessed 2026-07-18
  3. [S3]IFRS - Use of IFRS Standards by jurisdiction: Nigeria — IFRS Foundationaccessed 2026-07-18
  4. [S4]FRC Releases Roadmap Report for Adoption of IFRS Sustainability Disclosure Standards in Nigeria — Financial Reporting Council of Nigeriaaccessed 2026-07-18
  5. [S5]Roadmap Report for Adoption of IFRS Sustainability Disclosure Standards in Nigeria (Amended 2026) — Financial Reporting Council of Nigeriaaccessed 2026-07-18
  6. [S6]Introduction to the ISSB and IFRS Sustainability Disclosure Standards — IFRS Foundationaccessed 2026-07-18
  7. [S_TAX1]Nigeria Tax Act, 2025 has been signed – highlights — EY Globalaccessed 2026-07-18
  8. [S_TAX2]Nigeria's 2025 Tax Reform Acts Explained: Key Changes — Baker Tilly Nigeriaaccessed 2026-07-18
Last reviewed 2026-07-18 · Reviewer: Rafiu Olawuyi, FCA (Author / Technical Reviewer)