IFRS Sustainability Disclosure Taxonomy: Digital Tagging for IFRS S1 and S2

A practical guide to turning IFRS S1 and IFRS S2 disclosures into reliable digital facts—without confusing a valid filing with substantive compliance.

IFRS S1 and IFRS S2 are written for human-readable general purpose financial reports, but capital-market users increasingly consume the same information through databases, screening tools and automated analysis. The IFRS Sustainability Disclosure Taxonomy translates the disclosure architecture of the Standards into digital elements that can be attached to reported facts. Tagging can make a narrative, number, date, percentage or table easier to extract and compare without asking an analyst to re-key it.

The important distinction is that the Taxonomy is a digital representation of disclosure concepts, not a separate reporting framework. The underlying disclosure must first be prepared under the applicable IFRS Sustainability Disclosure Standards and the entity’s jurisdictional rules. Tagging then identifies the meaning, period, unit, reporting entity and—where relevant—dimensions of that disclosure in a structured format such as XBRL or Inline XBRL.

From disclosure requirement to tagged fact

The digital path starts with a source-grounded disclosure. Taxonomy selection, context, dimensions and technical validation follow; substantive review remains a separate control.

Makes reported information computer-readable. Investors and other users can search, extract, compare and analyse tagged sustainability-related financial information at scale.

Reflects IFRS S1 and IFRS S2 disclosure concepts. The 2024 Taxonomy reflects the Standards issued in June 2023 and includes elements associated with accompanying materials such as implementation guidance and illustrative examples.

Provides a common digital language. Standard elements and relationships support comparability across entities and jurisdictions when they are implemented consistently.

Supports both full and essential entry points. The essential entry point is designed as a base from which extensions can be built, subject to the filing architecture and local rules.

Works alongside the SASB Standards Taxonomy. Industry-based information may be tagged using relevant SASB elements where the preparer applies SASB Standards or IFRS S1/S2 together with industry-based guidance.

It does not decide which entities are required to apply IFRS S1 or IFRS S2.

It does not decide whether a jurisdiction mandates XBRL, Inline XBRL, another format or no digital filing at all.

It does not replace the entity’s materiality judgements, disclosure preparation or statement of compliance.

It does not turn a non-IFRS disclosure into an IFRS disclosure merely because an IFRS element has been attached to it.

It does not guarantee comparability when entities use inappropriate elements, excessive extensions, inconsistent contexts or outdated taxonomy versions.

It does not provide a single universal validation rulebook. Filing systems can add local calculations, mandatory fields, extension rules, language requirements and filing deadlines.

The IFRS Foundation publishes and maintains the taxonomy, but filing obligations are normally created through jurisdictional adoption, securities regulation, exchange rules or another reporting mandate. Two entities that both publish IFRS S1/S2 disclosures can therefore face different digital requirements. One may submit an Inline XBRL package to a regulator; another may publish only a human-readable report; a third may use a local sustainability taxonomy that imports or maps to IFRS elements.

Before a tagging project begins, the reporting team should obtain a controlled filing-rule profile. It should answer the following questions rather than relying on assumptions carried over from financial-statement tagging:

Extensions are necessary in digital reporting because entities sometimes disclose material facts that are not represented by a standard element. They are also a major source of lost comparability. A good extension policy therefore starts with a presumption in favour of using the base taxonomies and requires documented evidence before a new element is created.

Extension and version-control decision tree

Search the current IFRS Taxonomy first, then the relevant SASB Taxonomy and any permitted local taxonomy. Create an extension only for a genuine reporting concept that cannot otherwise be represented faithfully.

IFRS S1 requires an entity to refer to and consider the applicability of SASB disclosure topics and, when identifying applicable metrics, the metrics associated with those topics. The SASB Standards Taxonomy is therefore relevant when industry-based information forms part of the entity’s reporting basis. It is maintained separately from the IFRS Sustainability Disclosure Taxonomy, although the two are intended to work together.

The current SASB Standards Taxonomy package at the source cut-off is the 2024 update, issued on 28 October 2024 and technically updated on 7 November 2024. The 2022 and 2021 packages are marked deprecated. A tagging team should not select an old package simply because its software template or prior-year mapping still points to it.

Record whether the SASB element supports a disclosure required by IFRS S1/S2, a metric selected through SASB guidance, or a separate SASB-only claim.

Keep IFRS and SASB namespaces visible in the mapping register rather than renaming all concepts as local fields.

Check whether a December 2025 consequential amendment to selected climate-related SASB Standards changes the underlying metric or taxonomy update path for periods beginning on or after 1 January 2027.

Do not use a SASB tag to imply that the entity has applied an entire SASB Standard or industry classification unless the basis of preparation supports that statement.

Taxonomy versioning is not an administrative detail. A taxonomy package establishes the namespace, element identities, labels, references and relationships used in the filing. Using a deprecated or mismatched version can break validation, sever comparability and make prior-year mappings misleading.

The proposal responds to the December 2025 amendments to IFRS S2 greenhouse gas emissions disclosures, which are effective for annual periods beginning on or after 1 January 2027, with early application permitted. The proposed taxonomy changes include digital modelling for:

the explanation required when an entity applies the limitation on measuring and disclosing Scope 3 Category 15 emissions beyond financed emissions;

the total Scope 3 Category 15 greenhouse gas emissions and the subtotal of financed emissions included in that total;

the industry-classification system selected for financed-emissions disaggregation and the explanation of why that system provides useful information about transition-risk exposure;

related reference, table, axis and member changes needed to reflect the amended IFRS S2 requirements.

A change-impact team should identify the disclosures affected, check whether current custom extensions can be retired, assess comparative tagging and determine whether software, validation rules and data models need to change. Final implementation should wait for the issued taxonomy update and the applicable jurisdictional filing instructions.

The two gates should communicate. A substantive reviewer may find that one narrative contains several separately taggable facts; a digital reviewer may find that a custom extension hides a standard concept. However, the sign-offs should remain distinguishable so that a software warning is not mistaken for a disclosure deficiency and a clean validator report is not treated as evidence of compliance.

The team maps the water-risk narrative to existing IFRS taxonomy text elements, tags the exposed-revenue estimate with the relevant monetary concept and context, uses standard GHG elements and dimensions for the emissions data, and applies a current SASB element to the industry metric. A proposed custom element called “strategic supplier climate resilience” is rejected because existing elements can tag the separate facts. One genuine extension is approved for a company-specific operational metric that has no suitable IFRS, SASB or regulator element; it is related to the nearest broader concept and documented in the extension register.

Technical validation initially passes, but substantive review finds that the Scope 3 fact was tagged with the consolidated-group context while the published metric excluded a recently acquired subsidiary. The file is therefore technically valid but substantively misleading. The team corrects either the disclosure boundary or the tag context, documents the decision and reruns both review gates.

An entity-specific taxonomy extension represents a genuine reporting concept that cannot be faithfully tagged with an available base-taxonomy element. Search the current IFRS, relevant SASB and permitted local taxonomies first, then document the new element and its relationship to the nearest broader standard concept.

Treat digital tagging as a controlled reporting layer, not as an after-the-fact software task. The most reliable sequence is: establish the reporting and jurisdictional basis, stabilise the disclosure, map to current IFRS and SASB elements, control extensions and versions, and run both technical and substantive validation. That approach preserves comparability without allowing digital form to obscure the quality of the underlying IFRS S1/S2 information.