Disclosure focus
This disclosure asks an organisation to explain the processes it uses to identify, assess and manage sustainability-related risks. In practice, the report should show how those processes work in the business, not just that they exist on paper. The focus is on the organisation’s actual approach to spotting and handling risks that could affect its sustainability performance or prospects.
The practical question is whether those processes cover the organisation as a whole, including relevant operations, business units and locations, or whether they are limited to a few flagship sites or selected activities. A useful explanation will make clear the scope of coverage, how often the processes are used, and whether they are embedded in day-to-day decision-making across the business.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official IFRS source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show s1-44-a sub-elements (LRA working checklist)
Note what has changed since the previous reporting period.
Set out the factors used to judge the type of matter, how likely it is, and how large the effect could be.
State which information sources were used and which parts of the business were included.
List the inputs and assumptions used in the assessment.
Describe how the matter is being tracked and reviewed.
Explain how it is ranked against other business risks.
Say whether scenario analysis is used to identify the risk, and if so, how it is applied.
How to prepare it
1Set the boundary first: decide which parts of the business, operations and time period are in scope, and make sure the same boundary is used consistently across the disclosure.
2Define the screening rules you used to decide what matters: explain the factors you applied to judge whether an issue was significant, including how you weighed its character, how likely it was, and how large the effect could be.
3Gather the underlying support: pull together the data sources, working inputs, assumptions and other parameters that sit behind the assessment, and keep them traceable to the figures or narrative you will report.
4Build the disclosure from the evidence: prepare the numbers or written explanation, and include how you monitor the matter over time, whether you used scenario analysis to help identify it, and how it was ranked against other business risks.
5Record any differences from the previous period and any limits in the coverage: note what changed since last time, and explain any exclusions, scope gaps or changes in method so the reader can see why the current result is not directly comparable.
6Check the draft against the source material before sign-off: confirm the wording and content still match the official requirement, and resolve any gaps, inconsistencies or unsupported statements before finalising.
Request the data
Request the risk process evidence from ERM
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
How do we identify, assess, monitor and prioritise sustainability-related risks, and what changed from the previous period?
Please use your organisation’s own risk-management language first, then map it to the disclosure terms for review. For example, if you talk about risk registers, heatmaps, control reviews or issue logs internally, use those labels rather than framework wording in the first draft. Check the official source before sign-off.
Weak request
Please provide the sustainability risk process disclosure wording and the criteria, sources, inputs, monitoring, prioritisation and scenario analysis details.
Why it fails: This is too close to framework language and does not tell the owner what to pull from their own systems. It also does not specify the boundary, period, source records or the internal labels they should use, so the response is likely to be incomplete or hard to map.
Better request
Please send the current risk-register extract and supporting notes for [reporting period] covering [entity / boundary]. We need your own wording for how risks are identified, scored, reviewed and ranked, plus what changed since [prior period], what data feeds and assumptions are used, and whether scenario testing is part of the identification step. Include the source system, owner, last update date and any caveats.
Industry examples
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Set out, in plain terms, how the assessment was built: what counted as the issue, what threshold or judgement points were used, which parts of the business were included, what inputs and assumptions fed the analysis, and how the team monitored it.
Context note
Explain what the figures mean for the business by linking the assessment to the wider risk picture, including how it compares with other priorities and whether forward-looking testing helped identify it.
Fluctuation statement
Describe the main reasons the assessment moved from the prior period, focusing on the practical drivers of any change in scale, likelihood or significance and noting any shift in the way it was monitored or evaluated.
Content index entry
s1-44-a Processes for sustainability-related risks — [location / page] / [notes]
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Preparation tools & forms
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
The team asks the sustainability lead for a process that actually sits with risk, finance, operations, or another business owner, so the evidence comes from the wrong place.
Framework language only
People collect answers using reporting jargon instead of the organisation’s own process names, which makes the source material hard to trace back to day-to-day controls.
Scope left vague
The data pull does not pin down which sites, entities, or activities are in scope, so the final pack mixes covered and uncovered operations.
Wrong period basis
The team gathers information for the wrong reporting window or timing cut-off, so the evidence does not match the period being reported.
Mixed counting basis
Different teams use different bases for the same metric or narrative, and the pack combines them without reconciling the method first.
Source labels lost
Original file names, system tags, or reference codes are stripped out during collation, so no one can trace a figure back to its first record.
Populations merged
Separate groups that should stay distinct, such as different business units or risk sets, are rolled into one dataset and the distinctions disappear.
No evidence trail
The pack is assembled without notes on where each input came from, who checked it, or when it was approved, so the audit trail is incomplete.
Where judgement is often needed
Acquisitions and disposals during the year
Set a clear cut-off for when newly bought or sold operations enter or leave the risk review, and explain any year-on-year movement caused by those boundary changes.
Different local definitions for the same risk topic
Where country teams use different labels or thresholds, choose one group-wide basis for the write-up and note any local variations that affect how the risk is spotted or tracked.
Operations close to the inclusion boundary
Decide how to treat sites, ventures or activities that sit just inside or just outside the review perimeter, and disclose the rule used so readers can see why they were included or left out.
Mix of measured data and management estimates
If some inputs come from direct records and others from judgement-based estimates, say which parts are measured, which are estimated, and why that split was needed.
Timing basis for the reporting period
Choose whether the description reflects conditions at period end, an average over the year, or another timing basis, and explain the basis if it affects how the risk process is understood.
Rounding and small numerical differences
Apply one rounding approach across the disclosure, and if totals do not tie exactly because of rounding, make that clear rather than forcing the figures to appear exact.
Privacy limits on site-level detail
When local privacy or confidentiality rules prevent naming individual locations or teams, group the information at a higher level and explain the aggregation used.
Changing data sources across the group
If different business units rely on different systems, surveys or registers, describe the main sources used and note any material gaps or inconsistencies that could affect comparability.
Scenario work used only for some risks
If forward-looking scenario work is applied to only part of the risk set, explain which risks were covered, which were not, and the practical reason for that choice.
Linking the process to other enterprise risk work
Where the sustainability risk process is embedded in wider risk management, state how it sits alongside other risk reviews and where a separate judgement was made to prioritise it.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — manufacturing
We updated our climate, energy and supply-chain risk write-up this year because higher electricity prices, tighter customer delivery windows and a new supplier concentration in one region changed both the size and timing of several exposures. For each item we judge how likely it is to arise, how large the effect could be, and whether the evidence comes from plant data, procurement records, incident logs, management estimates or external climate scenarios; we cover our own sites, key contractors and the logistics routes that support them. - We track these matters through monthly risk reviews, operational dashboards and board reporting, and we compare them with other business threats so the most material items are not crowded out by finance, cyber or safety issues. - Scenario work is part of how we spot and rank the risks: yes, we use it by testing a low-carbon transition case and a severe weather case against our current footprint, then feeding the results into our assumptions, thresholds and mitigation plans.
Illustrative only; shows how a reporter might explain year-on-year changes, the basis for judging each exposure, the information used, how it is watched, how it is weighed against other risks, and how scenario work informs identification and ranking.
Illustrative (synthetic) example — retail
Compared with last year, our customer-demand, data-security and store-disruption risks were reweighted because online sales grew faster than expected and a small number of distribution hubs now carry a larger share of volume. We assess each risk using a simple set of tests: how probable it is, how severe the impact could be, and whether the evidence comes from sales data, IT alerts, lease records, weather feeds or management judgement; the scope includes our stores, e-commerce platform, warehouses and third-party fulfilment partners. - The company monitors these exposures through weekly operational checks, monthly risk committee papers and exception reporting, while also setting them against other enterprise threats so they are not treated in isolation from liquidity, compliance or people risks. - Scenario analysis is used in the identification stage: yes, we run a high-inflation case and a prolonged outage case to see which risks become more significant, which assumptions need changing and where extra controls are needed.
Illustrative only; shows how a reporter might describe changes since the previous period, the basis used to judge significance, the sources and operational perimeter, the monitoring rhythm, the relative place of these risks in the wider risk set, and the role of scenario analysis in spotting and prioritising them.
How companies report S1-44-a in practice
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
Hang Lung Properties Limited
Real Estate · Hong Kong · 2025
Hang Lung Properties Limited’s Sustainability Report 2025 provides evidence of processes to identify, assess, prioritise, and monitor sustainability-related risks and opportunities, including integration of these processes (p.218). The report also details the use of scenario analysis in risk identification, describing inputs used for climate-related scenarios (p.227). However, the report lacks clear information on changes versus prior periods, criteria for nature likelihood and magnitude, data sources and scope of operations covered, and inputs and parameters, with some ambiguity around how sustainability risks are prioritised relative to other enterprise risks (p.219).
Hyundai Glovis Co., Ltd.
Water Transportation · South Korea · 2025
Hyundai Glovis Co., Ltd.’s 2025 Sustainability Report covers its processes to identify and assess material climate-related impacts, risks, and opportunities, referencing the TCFD framework on page 129. The report also details its monitoring approach, including on-site inspections for high-risk business sites and major operations on page 63. However, the report lacks clear disclosures on changes versus prior periods, inputs and parameters, and scenario analysis in risk identification, while the scope of data sources and prioritisation of nature-related risks versus other enterprise risks are mentioned but remain unclear (pages 138 and 58 respectively).
Hyundai Engineering & Construction Co.,Ltd.
Construction and Engineering · South Korea · 2025
Hyundai Engineering & Construction Co., Ltd.’s 2025 Sustainability Report includes a scenario analysis conducted within the reporting period, specifically referencing a low-emission scenario aligned with the IEA NZE 2050 pathway (p.46). The report also provides related context on risk management processes used to identify, assess, prioritise, and monitor sustainability-related risks and opportunities (pp.138-139, 141, 148). However, the report lacks clear disclosures on changes versus prior periods, criteria for nature likelihood and magnitude, data sources and scope of operations covered, and monitoring approaches, with inputs and parameters and prioritisation versus other enterprise risks only partially addressed and unclear (pp.25, 138).
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Scenarios to work through
A group has updated its climate and water risk review after a dry winter affected one region more than the others. The finance team wants to keep last year’s wording because the overall risk ranking did not change.
QShould the narrative explain what has changed since the previous reporting period, even if the headline ranking is unchanged?
Reveal model answer →Hide answer ↑Yes. The explanation should show whether the way the risk process works, the evidence used, the scope covered, or the assumptions applied has moved on from the prior period. A stable ranking does not remove the need to describe any shifts in the process or in the basis for the assessment.
Why this matters · Readers need to see what is new, not just whether the final ranking moved.
A preparer has two internal models for judging a supply-chain heat stress risk. One uses only direct suppliers in Europe, while the other also includes key contract manufacturers in Asia and a different threshold for what counts as severe impact.
QWhat should the team do before describing the basis for identifying the risk?
Reveal model answer →Hide answer ↑It should set out the practical tests used to judge how serious, how probable, and how large the effect could be, and it should explain the data inputs, assumptions, and coverage of operations behind those tests. If more than one model exists, the team should be clear about which one is used for the disclosure and why.
Why this matters · The basis for the judgement must be transparent enough for a reader to understand how the conclusion was reached.
A company monitors sustainability risks through monthly dashboards, but only for sites in its owned operations. It also has joint ventures and outsourced logistics, which are reviewed separately in a different risk forum.
QHow should the preparer describe the monitoring and the scope covered so the disclosure is not misleading?
Reveal model answer →Hide answer ↑It should explain how the risk is tracked over time and make clear which parts of the business are included in that monitoring. If some operations are outside the main dashboard, the disclosure should say so and avoid implying that the whole group is covered in the same way.
Why this matters · The monitoring description should match the actual coverage of the business.
During year-end drafting, the sustainability team notes that a transition risk is now being watched alongside cyber and liquidity risks in the enterprise risk register. The board wants to know whether it is treated as a top-tier issue or simply logged with the rest.
QHow should the team explain the place of this risk relative to other business risks, and should it mention scenario analysis if that was part of the identification work?
Reveal model answer →Hide answer ↑It should explain how the sustainability-related risk is weighed against other enterprise risks, including whether it is elevated, grouped, or handled in the same process as other major risks. If scenario analysis was used to help spot the risk, the disclosure should say that and briefly describe how it fed into the identification process; if it was not used, that should not be implied.
Why this matters · The disclosure should show both priority and method, including whether forward-looking scenarios helped identify the risk.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
IFRS / ISSB
s1-44-a
within IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information
Open official source →Related & explore
FAQ
Questions this page answers
For s1-44-a, what should I gather before drafting the disclosure, and how do I use the page’s step-by-step preparation section?+−
Start with the datapoints listed on the page: period-on-period changes, nature risk criteria, coverage and data scope, model inputs and settings, monitoring method, risk ranking basis, and scenario analysis use. The step-by-step section is there to help you turn those inputs into a draft in a practical order.
What data do I need to collect for s1-44-a if I am the ESG manager or data owner?+−
The page points you to collect the specific inputs behind the disclosure, including the scope of coverage, the criteria used to judge nature risk, the model settings and inputs, the monitoring method, and the basis used to rank risk. It also flags period-on-period changes and scenario analysis use, so you can explain what changed and how the analysis was applied.
How do I decide the scope and methodology for s1-44-a using this page?+−
Use the page’s datapoints to define what is in scope, how the data is covered, and which criteria and ranking basis you are using. The page is designed to help you document the method clearly enough that someone else can follow how the disclosure was built.
Who should own the s1-44-a disclosure work, and what should each person contribute?+−
The page is set up for a sustainability/ESG manager, HR or data owner, and assurance reviewer to work from the same checklist. In practice, that means one person should coordinate the draft, data owners should supply the underlying inputs, and the reviewer should check the evidence pack and claims.
What evidence pack do I need to make s1-44-a assurance-ready?+−
The page says the evidence pack has five items and is meant to support assurance readiness. Use it to keep the underlying support together with the draft so each claim can be traced back to evidence.
What are the six assurance claims I need to verify for s1-44-a?+−
The page says there are six assurance claims to verify, each linked to a claim, risk, and evidence check. Use them as a control list so you can test whether the disclosure is supported before it goes to review.
What are the common reporting gaps or mistakes on the s1-44-a page, and how do I avoid them?+−
The page includes a list of common reporting gaps and mistakes to help you spot weak points before drafting. A practical use is to compare your draft against that list and fix missing scope, unclear methods, or unsupported statements early.
How do I use the Prep & Assurance workbook for s1-44-a?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format, which is intended to help you organise the disclosure inputs and assurance checks. Use it alongside the page’s preparation steps and evidence pack so the draft and support stay aligned.
What is the printable Library Card for s1-44-a, and when should I use it?+−
The Download Centre also includes a printable Library Card in .pdf format. It is useful as a quick reference while you are preparing the disclosure, checking evidence, or reviewing the draft with colleagues.
How can I turn the s1-44-a data into a draft disclosure?+−
The page gives you draft-output support, including visualisation ideas, narrative starters, and a content-index line. Use those to turn the prepared data and method notes into a readable draft rather than starting from a blank page.
Can I reuse data from ESRS 2 (General Disclosures) for s1-44-a?+−
The page says ESRS 2 (General Disclosures) is the closest ESRS correspondence, so it can help you think about alignment. The practical takeaway is that data may be reusable, but you still need to check the page’s own disclosure points and draft the wording for this page separately.
More questions this page can help with
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