Page 38 - CMA Journal (Nov-Dec 2025)

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Image-4 (Refer Image-5 for overview of disclosures
regarding organizational “Strategy”)
IFRS – S1 (Governance) IFRS – S2 (Governance)
Disclosures about Board & Management Disclosures about Board & Management (3) Risk Management: The
Oversight of Sustainability Risk Oversight of Climate-Related Risk
primary objective of disclo-
Identify the board / committee Identify the board / committee
sures related to risk manage-
responsible for sustainability governance. responsible for climate governance.
IFRS-S1
Para Info about Governing Body (Para 27 a) (TOR’s / Skill & Competencies/ (TOR’s / Skill & Competencies/ ment is to elaborate the
26 – 27 Info about Management Role (Para 27 b) Frequency of Meetings). Frequency of Meetings).
organizational process of
Disclose how sustainability Disclose how climate-related risk
reponsibilities are assigned. reponsibilities are assigned. identification, assessment,
(Management & Internal control). (Management & Internal control).
prioritization, and monitoring
Explain decision-making process for Explain decision-making process for
IFRS-S2 of risks and opportunities
Para Info about Governing Body (Para 6 a) sustainability strategy and risk climate-related strategy and risk
Info about Management Role (Para 6 b)
06 management. management. regarding sustainability²¹.
(Targets & Risk Management). (Targets & Risk Management).
Image-5
To better understand the
mechanism for execution of
IFRS – S1 (Strategy) IFRS – S2 (Governance)
sustainability-related actions, Disclosures about Sustainability Risks, Disclosures about Climate-Related Risks,
organizations are also required to Opportunities & Financial Impact Opportunities & Financial Impact
provide information about their • Sustainability related Risks & Opportunities Describe sustainability-related risks and Describe climate risks and opportunities
(Para 30-31) opportunities that could effect financial
decision-making process, whether • Business Model & Value Chain (Para 32) positions. affecting business prospects and financial
it is about developing sustainability IFRS-S1 • Strategy & Decision Making (Para 33) position.
• Financial position, financial performance &
Para Explain their impact on business model,
strategy, target setting, or risk 28 – 42 cash flows (Para 34-40)
• Resilience (Parac 41-42) strategy, and financial planning. Explain the impact on business model,
management.
Explain the resilience of strategy to strategy and financial planning.
(Refer Image-4 for overview of disclosures • Climate-related Risks & Opportunities address uncertainties with qualities
IFRS-S2 (Para 10-12)
regarding organization’s process of Para • Business Model & Value Chain (Para 13) and *quantitative assessment Disclosure transition plans and scenario
“Governance) 08 – 23 • Strategy & Decision Making (Para 14) Ensure consistency between analysis (e.g. 1.5 o C & 2 o C pathways to
• Financial position, financial performance & sustainability disclosures and financial define residences.
(2) Strategy: The aim of cash flows (Para 15-21) reporting
• Climate Resilience (Parac 22-23)
disclosures regarding strategy *Optional
is to help users understand the strategy & resilience While disclosing information about the risk
capabilities of the organization. Hence these management mechanism, organizations should
disclosures elaborate the strategy and financial include both general and climate-related risks and
planning of the organization applied to manage the opportunities. Such disclosures should include
identified material risks & opportunities regarding information about how risks are identified and
sustainability and show its resilience. 18 assessed and how these are monitored and
Entities are required to describe their sustainability managed²².
(general/climate) related risks and opportunities that Where an organization already has an Enterprise Risk
could have an effect on their financial position, Management (ERM) mechanism in place, the
business model and strategy, financial planning as organization is mandated to present information
well as on their overall value chain. regarding the integration of sustainability risk with

For IFRS S1 entities are mandated to present ERM.
information about their resilience to deal and IFRS S2 specifically prescribes that due care should
recover from sustainability related risks along with be taken to avoid duplication of information²³.
risk mitigation strategies in both qualitative and
(Refer Image-6 for overview of disclosures regarding
quantitative forms, where supportive data is
available. 19 organization’s process of “Risk Management”)
(4) Metrics & Targets: The aim of these disclosures is to
For IFRS S2 entities should additionally provide
show users how an organization measures and
information about their scenario analysis performed
tracks progress of its sustainability actions and its
in accordance with the latest international
sustainability-related risks and opportunities by
agreements on climate change while disclosing
information about climate related resilience. 20 using industry-based metrics²4.
When disclosing such information, there is usually a clear
Entities are also required to ensure that there is
distinction between disclosures related to general
consistency between sustainability related
sustainability information and climate-related
disclosure and financial reporting.
sustainability information.
ICMA’s Chartered Management Accountant, Nov-Dec 2025