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Take 5: Aligning to the IFRS sustainability disclosure standards: IFRS S1 and S2
In alignment with the new global sustainability reporting standards, the Securities Commission Malaysia (SC)’s Advisory Committee on Sustainability Reporting (ACSR) has released a Consultation Paper and is seeking public feedback to incorporate the sustainability and climate-related International Financial Reporting Standards (IFRS) S1 and S2 standards by the International Sustainability Standards Board (ISSB) into Malaysia’s National Sustainability Reporting Framework (NSRF).
The core contents of the IFRS S1 and S2 disclosure standards are built on the four Task Force on Climate-related Financial Disclosures (TCFD) pillars, namely:
- Governance
- Strategy
- Risk management
- Metrics and targets
Among the climate-related metrics, the IFRS S2 disclosure standard includes:
- Scope 1, 2 and 3 greenhouse gas (GHG) emissions
- Value or percentage of assets or business activities vulnerable to climate-related risks and opportunities
- Capital deployment
- Internal carbon prices
- Remuneration
To prepare for the adoption of the new sustainability standards and related reporting, companies can consider a comprehensive set of actions which includes gap assessment, reporting processes and data governance.