Page 37 - CMA Journal (Nov-Dec 2025)

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Image-2 disclosures about sustainability as
well as across other financial
STANDARDS TCFD 4 PILLAR STRUCTURE
reports¹4.
General Requirement Standard CORE CONTENT Core Content (IFRS S1 &
GOVERNANCE STRATEGY RISK MANAGEMENT TARGETS & METRICS As already discussed, the Core Content
(IFRS-S1) IFRS S2)

Thematic / Cross Industry Standard CORE CONTENT takes after the Four Pillar approach used
(IFRS-S2) under TCFD. Hence the focus is to provide
information about the overall governance
processes of the organization, how it
Industry Based Standards
(SASB) develops and executes its strategies and

Image-3
IFRS S1 & S2
IFRS S1 IFRS S2
Readers must keep in mind that
IFRS S1 & S2 share the same struc- SCOPE All Sustainability Risk & Opportunities Climate Risk & Opportunities
ture with regards to the “Core
KEY REQUIREMENTS Material Info about Sustainability Quantification of Climate Risks
Content” (as explained above); Financial Risks and Financial Impact
however, IFRS S1 provides some INDUSTRY METRICS Optional Mandatory
additional guidelines. These
additional guidelines prescribe the SCENARIO ANALYSIS Recommended Required
modus operandi for disclosures
and handling of information about GHG EMISSIONS Optional if Not Material Required
“Conceptual Foundations,” “Gener-
al Requirements,” and “Judgment, Uncertainties and
Errors,” which will be discussed in the following sections. plans, what mechanism is in place for managing risks and
opportunities regarding sustainability, setting targets for
Conceptual Foundations sustainability actions and how performance is
monitored.
(IFRS S1)
(1) Governance: The objective of disclosures related to
The IFRS S1 explains that sustainability-related
governance process is to help users understand the
information is useful and serves its purpose only when it
top-down approach of the organization for
is relevant and faithfully presented, hence depicting the
governance and internal controls system. Such
following characteristics:
disclosures are used to elaborate the approach of
• Fair Presentation: Disclosures require organizations organization for oversight and operational
to provide complete and accurate information about management of risk and opportunities regarding
risks & opportunities regarding sustainability which sustainability (general/climate) ¹5.
could affect its future prospects. Organizations
Organizations are required to present information
should also ensure that such information is
about their governing bodies that are assigned to
comparable, verifiable, and easy to understand¹¹.
oversee the sustainability actions. In this context,
• Materiality: Disclosure of material information disclosures about the composition, TORs, skills and
means if such information is omitted, misstated, or competencies of members of board or its
obscured, it could influence decisions of the user if sub-committees along with frequency of their
they are based on such reports¹². meetings, are required¹6.
• Reporting Entity: Disclosure of information in a Similarly, when providing information about
manner that clearly indicates that information mechanisms in place for execution of sustainability
regarding sustainability and financial information actions, organizations are required to present
both relate to the same organization¹³. information about management assigned to carry
out sustainability tasks. Furthermore, organizations
• Connected Information: Disclosure of the connec-
are required to provide details of their actions for
tion of information between risks & opportunities
development and implementation of sustainability-
regarding sustainability, which could impact the
related internal controls¹7.
future of organization, presented within its financial
ICMA’s Chartered Management Accountant, Nov-Dec 2025