Page 39 - CMA Journal (Nov-Dec 2025)

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Image-6 (Refer Image-7 for overview of
disclosures regarding “Metrics” used
and “Targets” set by organization)
IFRS — S1 (Risk Management)
IFRS — S2 (Risk Management)
Disclosures about Sustainability Risks, Disclosures about Climate-related Risks,
Opportunities & Financial Impact Opportunities & Financial Impact General Requirements
• Provide details on how climate-related (IFRS S1)
• Explain how sustainability risks are
• Info about risk management process & policies
IFRS-S1 risk are identified and assessed.
Para (Para 44a) identified and assessed.
43 – 44 • Info about how risk management process • Provide details on how climate-related Before discussing general
integrates with ERM (Para 44c) • Disclose how sustainability risks are
risk are monitored and managed. requirements, readers must note
prioritized, monitored and managed.
• Describe how the climate risks are that an organization can choose to
• Describe how sustainability risks are
integrated into enterprise risk apply IFRS S1 for sustainability
• Info about climate-related risk management
IFRS-S2 process & policies (Para 25a) integrated into enterprise risk management (ERM). reporting whether or not it adopts
Para • Info about scenario analysis (Para 25b) management (ERM).
24 – 26 • Due care to avoid duplication IFRS generally.
• Info about how risk management
process integrates with ERM (Para 25c) w.r.t IFRS-S1.
• Source of Guidance:
Organizations shall refer to
Image-7
Under IFRS S1, when disclosing
information about metrics used for
IFRS —S1 (Metrics & Targets)
IFRS —S2 (Metrics & Targets)
general sustainability, the Disclosures about Performance Disclosures about Climate performance
organization is mandated to Indicators for Sustainability-Related R&O indicators
present information about the Metrics: Metrics:
• Metrics applicable / relevant to the • GHG emissions *(Scope 1, 2, & 3).
source of metrics and their IFRS-S1 • Info about Metrics required and used by entity company's business and industry. • Physical & Transition Risk
Para (Para 46)
relevance to its business and 45 – 53 • Info about Targets set by entity (Para 51) • Metrics used to set the target and to • Opportunities
monitor progress. • Capital Deployment
industry²5. Targets: • Link to executive remuneration
• Quantitative or qualitative target the Targets:
Similarly, when disclosing entity has set. • Metric used to set target
• The period of target / timelines. • Objectives
information about targets under • The base-line to measure progress. • The period of target/ timelines.
IFRS S1, the organization is IFRS-S2 • Climate related Metrics (Para 29-32) • Any milestones / interim targets; • The base-line to measure progress.
Para
• Performance against each target.
• Any milestones / interim targets;
mandated to provide qualitative or 27 – 37 • Climate related Targets (Para 33-37) • Any revisions to the targets with • Weather absolute or intensity target.
explanation.
quantitative details, timelines, * As per GHG Protocol
baselines, any subsequent
revisions, as well as its performance against each target²6.
SASB standards for further guidance. Organizations
Under IFRS S2, while disclosing information about may also refer to CDSB Framework Application
metrics used for climate-related sustainability, the Guidance³0 or any other standard-setting body.
organization is mandated to present information about Disclosure of the source used for guidance is
categories of greenhouse gases (i.e., Scope-1, 2 & 3), required³¹.
measured in accordance with *Greenhouse Gas Protocol:
• Location of Disclosures: This is optional and subject
A Corporate Accounting & Reporting Standard (2004)²7.
to local regulations and laws. Disclosure could be
part of the management statement or referenced to
Furthermore, under IFRS S2, the organization is mandated
other published reports³².
to present information about its physical and transitional
risks regarding climate, related opportunities, and capital • Timing of Reporting: Sustainability reporting shall
deployed to address them. The standard mandates that coincide with the date of the financial statements
the organization present how climate considerations are and would cover the same reporting period³³.
factored into executive remuneration²7.
• Comparative Information: Disclosure of the
When disclosing information about climate-related comparative information is required and should be
targets under IFRS S2, the organization is mandated to made in descriptive form, where useful³4.
present information about metrics used to set targets,
• Statement of Compliance: An explicit statement of
the objectives of target setting, and duration or timelines
compliance is required except when prohibited by
of targets. Additionally, the organization is required to
local laws or regulations. Commercially sensitive or
provide information about the baselines used and
unavailable material information on risks and
approach to measure performance along with any
opportunities regarding sustainability can be
subsequent revisions to targets. For quantitative targets,
excluded by the organization³5.
the organization is required to distinguish between
absolute targets and intensity targets²8.
ICMA’s Chartered Management Accountant, Nov-Dec 2025