Who Must Comply with IFRS S1/S2? Scope and Adoption Timeline by Jurisdiction

Why Isn't There One Global Mandate?

The ISSB is a standard-setter, not a regulator. It issues the standards and recommends an effective date — annual reporting periods beginning on or after 1 January 2024 — but it has no authority to compel any government or exchange to require them. Each jurisdiction decides independently whether, when, and how to adopt IFRS S1/S2, whether through direct endorsement, incorporation into a local sustainability reporting law, or adaptation into a jurisdiction-specific standard built on the ISSB baseline. This is the same "endorsement" model long used for IFRS Accounting Standards, where jurisdictions individually decide whether to require, permit, or ignore the global baseline.

Who Tends to Be in Scope First?

Across jurisdictions that have moved to adopt IFRS S1/S2 (or close local equivalents), the pattern of early scope tends to follow a similar logic:

• Listed companies and large public-interest entities are typically brought into scope before private, unlisted companies.
• Financial institutions — banks, insurers, and asset managers — are frequently prioritized given their systemic exposure to climate-related financial risk.
• Large multinational groups are often captured indirectly even before their home jurisdiction mandates IFRS S1/S2, because a subsidiary or listing in an adopting jurisdiction can trigger group-level reporting obligations.
• Phased size or revenue thresholds are common, with the largest companies required to report first and smaller companies phased in over subsequent years. Specific thresholds vary by jurisdiction and should be confirmed against the applicable local rule before scoping any single company's obligations.

How Should a Multinational Group Approach Scope?

Because adoption is jurisdiction-specific, a multinational group's compliance obligations are rarely determined by its headquarters location alone. A group may need to comply because:

• Its home jurisdiction has adopted IFRS S1/S2 directly.
• It is listed on an exchange in a jurisdiction that requires IFRS S1/S2 for listed issuers.
• A subsidiary operating in an adopting jurisdiction triggers local reporting obligations that flow up into group-level disclosure.
• Investors, lenders, or customers request IFRS S1/S2-aligned disclosure voluntarily, ahead of any mandate, as a market or financing expectation.

This means scope assessment has to be done market by market rather than assumed from a single corporate domicile. For the country-level detail on which jurisdictions have moved on adoption, see ISSB Adoption Timeline: Which Countries Have Mandated IFRS S1/S2 Reporting?.

What Does "Adoption" Actually Look Like in a Jurisdiction?

Adoption is not binary. A jurisdiction may:

• Endorse IFRS S1/S2 directly and require them as issued by the ISSB.
• Adapt the standards into a jurisdiction-specific sustainability disclosure standard that is closely based on, but not identical to, the ISSB text.
• Permit voluntary early application ahead of any mandatory requirement.
• Reference IFRS S1/S2 for interoperability purposes alongside an existing regional framework, such as the EU's CSRD/ESRS regime. See IFRS S1/S2 vs CSRD/ESRS: Key Differences for Multinational Reporters for how that particular relationship works.

A growing number of jurisdictions across Asia-Pacific, the Middle East, Africa, and Latin America have begun endorsing or phasing in IFRS S1/S2, or standards closely modeled on it, through their local regulators as part of this broader global trend toward ISSB convergence.

How Should a Reporting Team Confirm Its Own Obligations?

Given the jurisdiction-by-jurisdiction nature of adoption, the reliable approach is a formal scope assessment: identifying every jurisdiction where the company is incorporated, listed, or has a reporting subsidiary, then checking the current adoption status and applicable thresholds in each. This scope assessment is typically the first deliverable in a broader gap analysis, and it directly informs the design of the disclosure program that follows. Semtrio's IFRS S1/S2 advisory service begins every engagement with this jurisdictional scoping step before any disclosure design work starts.

Semtrio Note: Semtrio's advisory work spans clients reporting across multiple jurisdictions, giving our team direct, current visibility into how different regulators are sequencing IFRS S1/S2 adoption — visibility we apply when scoping a client's specific obligations rather than relying on general assumptions.

Frequently Asked Questions

Does every company need to comply with IFRS S1/S2?

No. Compliance is mandatory only where a jurisdiction's regulator has formally adopted the standards; elsewhere, application is voluntary.

Who decides if IFRS S1/S2 are mandatory in a given country?

Each jurisdiction's own securities regulator, stock exchange, or government — the ISSB itself has no enforcement authority.

Can a subsidiary trigger group-wide IFRS S1/S2 obligations?

Yes. A subsidiary operating or listed in a jurisdiction that has adopted IFRS S1/S2 can create reporting obligations that flow up into the parent group's disclosures.

Are financial institutions typically prioritized in adoption?

Yes, banks, insurers, and asset managers are frequently among the first entities brought into scope given their systemic exposure to climate-related financial risk.

What is the first step in confirming compliance obligations?

A formal, jurisdiction-by-jurisdiction scope assessment covering every market where the company is incorporated, listed, or has a reporting subsidiary.

If your organization needs a clear answer on where and when IFRS S1/S2 compliance applies to your group, Semtrio can conduct a jurisdictional scope assessment as a first step. Contact Semtrio to get started.