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The start of IFRS S1/S2

Last year we published an introductory blog on the International Sustainability Standards Board’s (ISSB) two new sustainability standards: IFRS S1 and IFRS S2. As they became effective in January of this year (2024), we thought it appropriate to give an update on their general requirements and applications, as well as their adoption in the Mexican market.

As a reminder: IFRS S1 and IFRS S2 standards aim for companies to report their sustainability risks and opportunities through recognized indicators such as TCFD, SASB and CDSB. 

 

Clarifications that have come up since our last update:

1.       IFRS S1 focuses on financial information related to sustainability and its impact on cash flow and access to finance, requiring quarterly reporting. 

2.       IFRS S2 focuses on climate change risks and opportunities, proposing specific metrics and targets to improve understanding of sustainability strategy.

3.       It is no longer necessary to report a stand-alone TCFD analysis when adopting these standards, as they are based on the recommendations and scenario analysis format that TCFD previously covered.  

4.       There is a one-year grace period for their adoption after the entry into force of these standards this year. This extension also applies to Scope 3 emissions.

 

In Mexico, as in the rest of the world, sustainability reporting is migrating towards a more integrated perspective. The Financial Reporting Standards Board (CINIF, for its acronym in Spanish), in collaboration with 13 other entities, is currently in the process of implementing these standards. However, regulators’ approval is still needed for them to become mandatory in the country.  

It is a fact that the best reporting practices will include these standards. Therefore, we recommend starting to plan how to adopt them and when. 

For it, here is the IFRS website with educational materials, guides, and downloadable versions of these new standards. Start doing your homework.

I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.

Best,

Marimar

CEO, Miranda ESG

Contacts at Miranda Partners

Damian Fraser
Miranda Partners
damian.fraser@miranda-partners.com

Marimar Torreblanca
Miranda-ESG
marimar.torreblanca@miranda-partners.com

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