Sustainability General Flashcards
What is integrated reporting, and how does it connect to IFRS S1/S2?
Integrated reporting combines financial and non-financial data to provide a holistic view of how an organization creates value over time.
IFRS S1/S2 promote integration by requiring companies to disclose sustainability-related risks and opportunities that affect enterprise value.
What challenges arise when applying boundaries to sustainability reporting?
Determining whether to include upstream (supply chain) and downstream (product lifecycle) impacts.
Scope 3 GHG emissions are often difficult to measure and can lead to incomplete or inconsistent reporting. IFRS S1 encourages including material sustainability issues across the value chain, but boundary-setting remains subjective.
How do IFRS S1/S2 handle materiality, and how does it differ from frameworks like GRI?
IFRS Materiality focuses on investor needs and enterprise value—what is financially material to decision-making.
GRI Materiality has a broader focus on issues relevant to all stakeholders, regardless of financial impact. IFRS’s narrow materiality definition may exclude significant ecological or social impacts.
How does Marks & Spencer’s (M&S) “Plan A” sustainability report align with IFRS S1/S2?
M&S reports on climate risks (GHG emissions, sustainable sourcing), aligning with IFRS S2’s emphasis on material sustainability metrics.
M&S’s broader stakeholder focus may go beyond IFRS S1/S2, which prioritize investor-focused materiality.
What reforms introduced by IFRS S1/S2 aim to improve sustainability reporting?
Boards must report how they oversee sustainability risks. Companies must explain how they identify, assess, and manage ESG risks. Specific metrics (e.g., GHG emissions) make disclosures comparable across firms.
What are the key limitations of IFRS S1/S2 compared to other sustainability frameworks?
Focuses on enterprise value rather than broader societal or environmental impacts. Limited emphasis on engagement beyond investors. Annual reporting may not capture fast-evolving sustainability risks (e.g., climate emergencies).
