The auditor is the same person who signs your financials. Same standard body. Same expectation.
Runs on your public disclosures. Nothing from you.
You are the CFO or Group Financial Controller at a multinational, or an Indian company with cross-border investors. Your auditor asked how you handle IFRS S1 and S2. You have no answer that survives a partner meeting.
The International Sustainability Standards Board (ISSB), part of the IFRS Foundation, published IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) in June 2023. Both apply to annual reporting periods beginning on or after 1 January 2024. Jurisdictions adopt on their own timetables. Australia and the UK are early adopters, India and the US watch closely.
S1 sets the general framework: what a company must disclose about sustainability risks and opportunities that could reasonably be expected to affect its cash flows. S2 zooms in on climate, with specific requirements for governance, strategy, risk management, and metrics and targets.
S2 fully absorbs the TCFD recommendations, so a company already reporting to TCFD has a head start. S2 goes further: it requires Scope 1, 2, and 3 emissions using GHG Protocol, with industry-specific SASB-based metrics for 68 industries.
The output goes in the general-purpose financial report, alongside the financial statements, and is subject to assurance from the same auditor.
Global audit firms started ISSB readiness reviews in 2024. Companies with international investors get the readiness question in board meetings today. The Institute of Chartered Accountants of India is running an ISSB implementation working group. Watch for a formal India adoption timetable.
Three failure modes we see on every ISSB scan.
Sustainability sits in a spreadsheet the audit team cannot open. When the audit meeting comes, nothing reconciles.
A back-of-envelope Scope 3 estimate the year before, restated the following year, with no explanation of why. Assurance fails.
S2 requires SASB industry metrics. A generic climate response leaves those metric fields blank.
Carbon-OS is the ledger for sustainability data. The auditor opens it the same way they open the general ledger.
Every restatement carries a reason, a date, and the person who signed it. Audit reads it as controlled, not messy.
The 68 SASB-industry metric sets sit inside Carbon-OS. Your industry loads on selection.
Not yet. Adoption timing is under discussion at MCA and ICAI. The IFRS Foundation and India's regulators are working through interoperability with existing rules.
S2 fully absorbs the TCFD 11 recommended disclosures. TCFD reporters have most of the S2 answers already, but must add Scope 3 and SASB metrics.
Assurance is not universally required in the standard, but jurisdictions are adopting it. Expect limited assurance in year one, moving to reasonable assurance over three to five years.
CSRD (ESRS) and ISSB share concepts but differ in scope. CSRD is broader (double materiality, wider ESG). ISSB is climate-financial-focused (single materiality). Interoperability guidance is published.
Only where the local regulator requires it, which today is few jurisdictions. Private companies often adopt voluntarily to satisfy customer or investor asks.