ISSB·Explainer·Materiality and scope
IFRS S1 risk-management disclosure should explain the process, not only list risks. Describe the inputs, parameters, data sources and scope; whether and how scenario analysis supports identification; how nature, likelihood and magnitude are assessed; how sustainability-related risks are prioritised relative to other risks; how they are monitored; what changed from the previous period; the separate process for opportunities; and the extent to which these processes are integrated into and inform enterprise risk management.
Helps you decideIFRS S1 Risk Management Disclosures: Identification, Prioritisation and Integration into ERM
Reviewed 11 Aug 2026
15 min
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ISSB·Decision guide·Materiality and scope
Identify sustainability-related risks and opportunities by starting with the entity's business model and value chain. Map the resources and relationships the entity depends on or affects; identify dependencies, impacts and external changes that could create risk or opportunity; trace credible pathways to cash flows, access to finance or cost of capital; assign short-, medium- and long-term horizons; and challenge completeness using internal and external sources.
Helps you decideHow to Identify Sustainability-Related Risks and Opportunities Under IFRS S1
Reviewed 11 Aug 2026
13 min
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ISSB·Decision guide·Materiality and scope
First-time application should be designed as a controlled transition strategy, not a collection of informal shortcuts. IFRS S1 and IFRS S2 provide specific reliefs: no comparative information in the first annual reporting period; optional later publication in that first period; a climate-first option; temporary use of a previously used non-GHG-Protocol emissions method; and temporary omission of Scope 3 emissions.
Helps you decideWhich transition reliefs to use, how to disclose them, and how each choice affects the second reporting cycle.
Reviewed 11 Aug 2026
14 min
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ISSB·Decision guide·Materiality and scope
When no IFRS Sustainability Disclosure Standard specifically applies to a sustainability-related risk or opportunity, IFRS S1 requires the entity to use judgement to identify information that is relevant to primary-user decisions and faithfully represents the risk or opportunity. The entity must refer to and consider applicable SASB metrics.
Helps you decideWhich sources and entity-specific information best meet IFRS S1 relevance and faithful-representation objectives?
Reviewed 10 Aug 2026
9 min
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ISSB·Decision guide·Materiality and scope
IFRS S1 requires an entity to refer to and consider the applicability of SASB disclosure topics when identifying sustainability-related risks and opportunities and to refer to and consider SASB metrics when preparing disclosures in the absence of a specific IFRS Sustainability Disclosure Standard. Consideration is mandatory; automatic application of every SASB topic or metric is not.
Helps you decideHow to Use SASB Standards When Applying IFRS S1
Reviewed 11 Aug 2026
15 min
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ISSB·Decision guide·Materiality and scope
IFRS S1 and IFRS S2 use two distinct proportionality mechanisms in specified requirements. The first limits the information search to all reasonable and supportable information available at the reporting date without undue cost or effort.
Helps you decideWhat information must be searched for, how sophisticated an approach must be, or whether a permitted qualitative alternative applies.
Reviewed 11 Aug 2026
13 min
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ISSB·Decision guide·Materiality and scope
IFRS S1 already requires disclosure of material nature-related risks and opportunities that could reasonably be expected to affect an entity’s prospects. Dependencies on nature and impacts on nature are important because they can create physical, transition, systemic and opportunity pathways to cash flows, access to finance or cost of capital.
Helps you decideWhich nature interfaces create risks or opportunities that could affect prospects, and what material information is needed?
Reviewed 10 Aug 2026
8 min
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ISSB·Decision guide·Materiality and scope
Under IFRS S1, materiality is assessed for information, not by declaring an ESG topic material through a universal score. First identify sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects.
Helps you decideWhich information must be included, omitted, aggregated, disaggregated or supplemented to meet primary users' information needs?
Reviewed 11 Aug 2026
16 min
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ISSB·Decision guide·Materiality and scope
A useful IFRS S1 and S2 gap assessment tests more than whether draft text exists. It should map each applicable requirement to a materiality conclusion, evidence, owner, control, draft location and review status; score whether the process is designed and operating; and prioritise remediation by compliance consequence, lead time, dependency and evidence weakness.
Helps you decideWhich workstreams and gaps must be remediated first to support a complete, controlled and defensible disclosure package.
Reviewed 11 Aug 2026
14 min
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ISSB·Decision guide·Materiality and scope
IFRS S1 requires material information about human capital risks and opportunities when workforce-related dependencies, impacts or conditions could reasonably be expected to affect the entity’s prospects. The assessment can cover the entity’s own workforce and workers in the value chain, depending on the business model and exposure.
Helps you decideWhich workforce matters create risks or opportunities affecting prospects, and which metrics faithfully represent them?
Reviewed 10 Aug 2026
8 min
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ISSB·Decision guide·Materiality and scope
Directors should approve the disclosure package only after they can explain how management identified material sustainability-related risks and opportunities, connected them to strategy and financial planning, supported climate resilience and greenhouse gas information, applied reliefs and judgements, operated disclosure controls and reached the proposed compliance conclusion. IFRS S1 and IFRS S2 do not prescribe a separate ten-question board procedure; the agenda in this article is an implementation tool for discharging oversight and testing whether the published claims are supported by evidence.
Helps you decideWhether the disclosure package is sufficiently complete, connected, evidenced and controlled for approval and any proposed compliance statement.
Reviewed 11 Aug 2026
17 min
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ISSB·Decision guide·Materiality and scope
After the first-year transition relief ends, IFRS S1 generally requires preceding-period comparative information for every amount disclosed and narrative or descriptive comparatives when useful for understanding the current period. The treatment of a changed amount depends on why it changed.
Helps you decideWhether a prior-period amount must be shown, revised or restated, and what explanation and publication correction are required.
Reviewed 11 Aug 2026
16 min
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ISSB·Decision guide·Materiality and scope
IFRS S2 requires an entity to identify climate-related physical risks, transition risks and opportunities that could reasonably be expected to affect its prospects, using all reasonable and supportable information available without undue cost or effort. Each identified risk is classified as physical or transition, linked to short-, medium- or long-term horizons and traced to concentrations in the business model and value chain.
Helps you decideWhich physical risks, transition risks and opportunities could reasonably affect the entity’s prospects, where are they concentrated, and how are they managed and measured?
Reviewed 10 Aug 2026
11 min
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