THE REGULATORY FRAMEWORK OF IFRS S1 AND IFRS S2 IN THE CONTEXT OF SUSTAINABILITY-ORIENTED CORPORATE DISCLOSURE

Abstract

The study presents IFRS S1 and IFRS S2 as foundational elements of the new global regulatory framework for sustainability‑oriented corporate reporting, established by the International Sustainability Standards Board (ISSB). These standards are positioned as the cornerstone of sustainability‑related disclosure, aiming to ensure conceptual consistency, methodological clarity, and global comparability of corporate reporting practices. From a theoretical perspective, the study highlights the integration between financial and non‑financial reporting, introduced by the ISSB framework through the principle of connectivity of information. IFRS S1 and IFRS S2 do not treat sustainability as a separate or peripheral component, but rather as an integral part of financial information (even when referred to as “non‑financial”), relevant to the assessment of future cash flows, access to financing, and the cost of capital. Their investor‑oriented focus aligns with the traditional logic of IFRS, yet simultaneously conveys the message that enterprises should not perceive sustainability as an ethical declaration, but as a financially material managerial priority. At the same time, the study reveals the complexity of the practical implementation of the standards. The requirements of IFRS S1 and IFRS S2 necessitate the development of sophisticated internal systems for data collection, processing, and verification, as well as a high degree of organizational coordination. This transforms sustainability reporting into a resource‑intensive process, demanding significant analytical, technological, and administrative capacity. Special attention is given to sector‑specificity, which the ISSB framework addresses through the integration of the SASB standards. Their role is presented as critical for ensuring analytical depth and relevance of disclosures, since the general principles of IFRS S1 and IFRS S2 alone cannot capture the diversity of industry‑specific risks and opportunities. Thus, SASB is framed not as a rigid set of mandatory indicators, but as a methodological instrument, guiding the identification of material sustainability topics in accordance with the principle of financial materiality. In an academic context, the study has several dimensions. On the one hand, it offers an analytical interpretation of the ISSB framework by systematizing the key concepts, principles, and requirements of IFRS S1 and IFRS S2. On the other hand, it possesses pedagogical value, as it presents a complex regulatory architecture in a structured, logically coherent, and methodologically sound manner, making it suitable for teaching in fields such as sustainability, corporate governance, financial reporting, and ESG analysis.