01
Claims must lead back to data and governance
IFRS S1 addresses sustainability-related risks and opportunities that could affect cash flows, access to finance or cost of capital. IFRS S2 focuses on climate-related risks and opportunities through governance, strategy, risk management, metrics and targets.
Whether or not an entity is required to apply a particular standard, this structure provides a useful control test: who is responsible, where the data came from, which period is measured and which assumptions support the target.
02
The gap between marketing and the internal record creates risk
Terms such as “green”, “carbon neutral” or “low emissions” may create expectations wider than the underlying data. A review should define product scope, unit, baseline, timeframe, exclusions and the degree of independent assurance.
The legal function should retain data versions, calculation sources, approvals and the basis for each material statement. A change in assumptions should trigger an update or correction process.
03
Disclosure standards do not replace applicable law
IFRS S1 and S2 are important reference points, but specific duties depend on jurisdiction, capital market, financing contract and sector. Businesses should map obligations rather than assume that one global report satisfies every local requirement.