A New Era in Global Sustainability Reporting
The International Sustainability Standards Board (ISSB) published its first two standards in June 2023: IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures). These standards create a global baseline for investor-focused sustainability disclosure (IFRS Foundation, 2023).
Both standards apply to annual reporting periods beginning on or after January 1, 2024, though the effective date depends on each jurisdiction's regulatory authority.
IFRS S1: General Requirements
IFRS S1 defines the framework for disclosing an organization's sustainability-related risks and opportunities. The standard is built on four core pillars:
| Pillar | Content |
|---|---|
| Governance | Governance processes used to monitor sustainability risks and opportunities |
| Strategy | Effects of sustainability risks and opportunities on business model and strategy |
| Risk Management | Processes for identifying, assessing, and managing sustainability risks |
| Metrics and Targets | Indicators used to measure and monitor performance |
This structure evolved directly from the TCFD (Task Force on Climate-related Financial Disclosures) recommendations. The ISSB has formally taken over the TCFD's responsibilities (FSB/TCFD, 2023).
IFRS S2: Climate-Specific Disclosures
IFRS S2 introduces climate change-specific disclosure requirements:
GHG Emissions Reporting
All companies must report Scope 1, Scope 2, and Scope 3 greenhouse gas emissions. While Scope 3 includes some transitional reliefs under the proportionality principle, it is a mandatory disclosure item in the long term (IFRS S2, paragraph 29).
Climate Scenario Analysis
Companies are expected to assess the potential impacts of climate change on their business models under different scenarios. This analysis covers two dimensions: physical risks (extreme weather events, water scarcity) and transition risks (policy changes, technology transformation).
Sector-Based Metrics
IFRS S2 references SASB (Sustainability Accounting Standards Board) sector standards to define sector-specific disclosure expectations. This ensures companies across different sectors provide comparable data (IFRS Foundation, 2023).
What This Means for Turkey
As a country that has adopted IFRS accounting standards, Turkey has a natural compatibility with ISSB standards. The Public Oversight, Accounting, and Auditing Standards Authority (KGK) developed Turkey's Sustainability Reporting Standards (TSRS) based on IFRS S1 and S2 (KGK, 2023).
This means that Turkish companies achieving TSRS compliance will also largely meet ISSB requirements. The key differences between TSRS and ISSB are limited to local regulatory additions and transitional provisions.
What Should Businesses Do?
- Assess your current reporting capacity: If you already report under the TCFD framework, the transition to ISSB will be relatively straightforward — the four-pillar structure is identical. Companies without any prior sustainability reporting face a steeper learning curve and should consider starting with Scope 1 and 2 emissions and basic governance disclosures before tackling the full S1/S2 requirement set.
- Develop a Scope 3 data strategy: IFRS S2's GHG disclosures require all scopes, including Scope 3. While a one-year transition relief allows companies to delay Scope 3 reporting, building the data collection infrastructure now — starting with a spend-based screening of the 15 Scope 3 categories — is the pragmatic approach.
- Review SASB sector metrics: IFRS S1 Appendix B recommends SASB sector standards for industry-specific disclosures. Identify the 3-7 material topics and associated metrics defined for your sector in the SICS (Sustainable Industry Classification System) and plan data collection accordingly.
- Monitor TSRS compliance: Follow KGK and SPK regulatory developments in Turkey closely. Since TSRS is directly based on IFRS S1/S2, understanding the ISSB framework is essential for TSRS compliance. Pay attention to any Turkey-specific adaptations or transition provisions that KGK may introduce.
- Map ISSB to other frameworks: If you also report to CDP, GRI, or face CSRD data requests from EU customers, create a cross-framework mapping table. The high overlap between ISSB and these frameworks means a single data collection process can feed multiple reporting obligations.
Key Takeaway: The ISSB positions itself as the "global baseline" for sustainability reporting. Regional standards like CSRD may add additional requirements on top of this baseline, and local standards like TSRS adapt it for national contexts. ISSB compliance provides a strong starting point for companies reporting across multiple frameworks — and in Turkey, achieving TSRS compliance means you have largely achieved ISSB compliance by design.
See how enterprise teams align their reporting with ISSB standards.