IFRS S1 and S2: ISSB sustainability reporting for Swiss businesses

ISSB and IASB: complementary roles

The IASB develops IFRS Accounting Standards. The ISSB develops IFRS Sustainability Disclosure Standards. Both belong to the IFRS Foundation, but their standards serve different purposes.

Financial statements report assets, liabilities, profit and cash flows. Sustainability disclosures explain risks and opportunities that may affect future cash flows, access to financing or the cost of capital.

The information needs to remain consistent. A company announcing a major business transformation should also examine its consequences for asset forecasts and financing assumptions.

Example: replacing energy-intensive equipment earlier than planned may change its useful life, expected expenditure and funding needs. Discuss the transition plan alongside the IAS 16 accounting treatment, even if the published reports remain separate.

IFRS S1 looks beyond climate

IFRS S1 is not limited to carbon emissions. Dependence on a resource, recruitment difficulties or supply chain risks may be relevant when they meet the standard's criteria and could affect the company's prospects.

The focus is information material to the primary users of general purpose financial reports. Start with the financial implications: which issues could change the outlook, and what would help an investor or lender understand them?

Illustrative example: a manufacturer depends on a single supplier exposed to water shortages. Management should consider potential stoppages, alternatives, costs and delivery delays. A general statement that “we respect the environment” would not answer those questions.

Sustainability reporting is therefore more than a selection of indicators chosen to create a positive impression. Explain why an issue matters, how it is managed and what the evidence shows.

IFRS S2 addresses climate-related risks

IFRS S2 covers physical climate risks, transition risks and climate-related opportunities. Physical risks may include damage to sites or supply disruptions. Transition risks may arise from changes in technology, regulation or customer demand.

The disclosure framework has four core areas:

Climate disclosures include greenhouse gas emissions under the applicable requirements and reliefs. Scopes 1, 2 and 3 cover different boundaries: direct emissions, emissions associated with purchased energy, and the wider value chain require different data and assumptions.

A figure without a boundary, method or reporting period cannot support a reliable comparison. Before requesting information from every supplier, define how each data point will be used and the precision needed.

What does this mean for a Swiss SME?

An SME may receive a request because it belongs to a group, supplies a large company or seeks financing. It may also choose voluntary reporting. These situations do not all require the same deliverables.

Ask the recipient to specify the standard, period, boundary and format. Is it a supplier questionnaire, an internal reporting package or a publication for investors? Who will approve the information?

Swiss law separately imposes transparency requirements on certain companies. Their scope does not automatically amount to full adoption of IFRS S1 and S2. Proposed reforms must also be distinguished from rules already in force.

The Federal Council's April 2026 consultation on a proposed sustainable corporate governance act illustrates that distinction. A legislative proposal and its objectives do not, by themselves, establish that a new obligation already applies to your SME.

Clear scoping can avoid producing a complete report when only a few supported data points are required. Conversely, completing a questionnaire is insufficient to claim full compliance with ISSB Standards.

ESRS differences and recent amendments

The European Sustainability Reporting Standards (ESRS) use double materiality: financial materiality and the company's impacts on people and the environment. ISSB Standards focus on sustainability-related financial information useful to providers of capital.

Interoperability work helps companies use both frameworks. It does not make them identical or mean one report automatically satisfies every European and international requirement.

Assess European application dates, thresholds and requirements using the relevant current rules. An outdated CSRD timetable is not a sufficient basis for determining a Swiss company's obligations.

In December 2025, the ISSB issued targeted IFRS S2 amendments concerning greenhouse gas emissions disclosures. They apply to periods beginning on or after 1 January 2027, with early adoption permitted. Identify which version your reporting uses and which reliefs are available.

Organise data collection that supports finance

List the information required and assign a source, an owner and a method to each item. Procurement, human resources, operations and finance often hold different parts of the evidence.

Control example: an energy bill rises from CHF 112,000 to CHF 140,000, an increase of 25%. This does not prove that consumption or emissions rose by 25%: prices, volumes and the reporting boundary may have changed.

Reconcile planned investment and expenses with the cash budget. Document estimates and their limitations. Closing controls and the preparation of financial statement notes provide useful connections with this information.

Frequently asked questions