I. What Is the IFRS Sustainability Disclosure Standards Implementation Plan for Listed Companies?
Origins and Purpose of IFRS Sustainability Disclosure Standards
The IFRS Foundation released IFRS S1 "General Requirements for Disclosure of Sustainability-related Financial Information" and IFRS S2 "Climate-related Disclosures" in 2023, marking the formal inclusion of sustainability information into the global financial disclosure system. The goal of these two standards is to make corporate sustainability disclosures consistent, comparable, and reliable, enabling investors to evaluate companies' long-term resilience and financial risks using the same standards.
For detailed information, refer to: IFRS S1 S2 Mandatory Disclosure Countdown! A Complete Guide to How Companies Should Align with IFRS Sustainability Disclosure Standards
Taiwan Regulatory Authority's Implementation Blueprint
The FSC has clearly planned in the "Sustainable Development Roadmap for Listed Companies":
- Listed companies with capital of NT$10 billion or more: Disclose 2026 information in annual reports starting from 2027
- Listed companies with capital of NT$5 billion or more: Disclose 2027 information in annual reports starting from 2028
- All other listed companies: Disclose 2028 information in annual reports starting from 2029
To help companies transition, the regulatory authority has promoted the "IFRS Sustainability Disclosure Standards Implementation Plan", including four phases: analysis and planning, design and execution, implementation, and adjustment and improvement, giving companies adequate preparation time to gradually establish internal controls and data disclosure mechanisms that meet IFRS requirements.
Key Principles of the Implementation Plan
- Establish governance and accountability mechanisms: Ensure the board of directors and senior management bear ultimate responsibility for disclosed information.
- Strengthen data consistency and traceability: Ensure sustainability and financial data come from the same source.
Include verification and external assurance requirements: Align with future IFRS audit systems.
II. How to Implement IFRS Sustainability Disclosure Standards?
Tasks and Timeline for Each Phase of Implementation Plan
Source: TWSE 2024/8 IFRS Sustainability Disclosure Standards Implementation Plan
Phase 1: Analysis and Planning
Goal: Understand current status and implementation needs, establish foundation for promotion.
In the early stages of implementation, companies should first complete understanding of the standards and inventory of current status, including:
- Establish a cross-departmental IFRS sustainability disclosure standards project team: Hold management introduction meetings to gain board support, form a cross-departmental project team, convene the first meeting and clarify division of labor and operating model.
- Conduct preliminary gap analysis between "existing sustainability information" and "IFRS sustainability disclosure standards": Compare the differences and impacts between "items that should be disclosed" and "company's current disclosure status."
- Understand the reporting entity required by IFRS S1S2: Companies must know that the reporting entity must be the same as the consolidated financial statement scope.
- Formulate implementation plan: Develop an implementation plan considering the company's operating scale and opinions of internal and external professionals.
The key to this phase is "building consensus" and "clear planning." It is recommended that companies simultaneously complete internal training to ensure senior management understands the governance and accountability requirements of IFRS sustainability disclosure standards.
Phase 2: Design and Execution
Goal: Establish systems and processes, initiate data collection and control.
This phase focuses on transforming previous analysis results into institutionalized processes, with main tasks including:
- Identify sustainability-related risks and opportunities and financial impacts, and assess material sustainability-related financial information: Information should cover "governance," "strategy," "risk management," and "metrics and targets"
For detailed information, refer to: IFRS S1 S2 Mandatory Disclosure Countdown! A Complete Guide to How Companies Should Align with IFRS Sustainability Disclosure Standards
- Identify and collect required data: Determine required financial information and ensure collected data complies with IFRS sustainability disclosure standards and related regulations. During data collection, consider sources and schedule data collection according to sustainability report disclosure timing.
This phase should complete system construction and tool deployment, enabling companies to have formal disclosure capability.
Phase 3: Implementation
Goal: Trial disclosure, verify systems and data quality.
Before formal disclosure, it is recommended that companies operate in pilot mode, simulating the complete IFRS sustainability disclosure report process:
- Trial preparation of annual report sustainability information chapter: Based on IFRS sustainability disclosure standards and annual report requirements, trial preparation of the sustainability information chapter in the annual report, and use this as a basis to improve the formal announcement and filing reporting process.
This phase bridges "system design" and "formal disclosure," effectively reducing uncertainty in the early disclosure period.
Phase 4: Adjustment and Improvement
Goal: Formal disclosure and continuous improvement.
Companies should announce and file the sustainability information chapter according to regulatory timeline requirements:
- Announce and file annual report sustainability information chapter: Disclose relevant information in the 2026 annual report sustainability information chapter according to IFRS sustainability disclosure standards, and complete announcement and filing together with the 2026 financial statements.
- Regularly review disclosure framework: Review and appropriately modify the company's current performance evaluation.
- Continuously analyze and improve IFRS sustainability information processes, continuously monitor the impact of changes in IFRS sustainability disclosure standards on company information disclosure and operations, and regularly review and improve existing processes.
- Evaluate the impact of IFRS sustainability disclosure standards based on feedback from investors, lenders, and creditors.
Through continuous improvement, companies can move from "regulatory compliance" to "value enhancement," making sustainability disclosure an important asset for brand trust and investor communication.
III. What Are the Three Major Challenges Companies Usually Encounter in Early IFRS Sustainability Disclosure Standards Implementation?
Source: Sustaihub compilation
Insufficient Organizational Momentum: Lack of Execution Timeline and Responsibility Division Planning
IFRS implementation is a major project for companies, and many companies still face insufficient driving force in the early stages because they lack clear directives from top management, making it difficult for the implementation plan to receive adequate support. Companies lack clear execution timelines and responsibility divisions, with no consensus formed on when to start, who is responsible, and how to connect with existing ESG reporting processes. This keeps implementation plans at the strategic level, difficult to transform into concrete actions and internal systems, ultimately delaying overall implementation progress and disclosure quality.
Insufficient Understanding: Misunderstandings and Information Gaps About IFRS S1, S2 Requirements
Many companies still remain at the understanding level, mistakenly thinking that IFRS is just a "new report template," but in fact IFRS S1 requires integration of sustainability and financial information, while S2 focuses on climate-related disclosure, emphasizing governance and risk management. Lack of understanding of governance, risk management, and indicator disclosure requirements may result in inability to meet IFRS S1/S2 requirements.
System Gaps: Data Collection and Internal Control Processes Not Yet Established
IFRS sustainability disclosure standards require disclosed data to be "consistent, traceable, and verifiable," but most companies' ESG data is still scattered across different department colleagues' computers, not managed uniformly.
This leads to situations during disclosure preparation where, due to lack of sound internal control procedures, sustainability information may be inconsistent, versions cannot be traced, or approval processes are unclear.
IV. What Solutions Do Companies Have for the Three Major IFRS Implementation Plan Challenges?
Source: Sustaihub compilation
Strengthen Organization: Establish IFRS Sustainability Disclosure Standards Project Team and Formulate Implementation Plan
Based on the sustainability promotion team, add representatives from finance, risk management, and compliance, with internal audit to ensure procedural correctness. Plan completion time points for each phase of the implementation plan content, subsequently report to the board quarterly, and submit execution results to the regulatory authority within 15 days after each quarter.
Strengthen Understanding: Arrange IFRS Sustainability Disclosure Standards Training
Let the project team first understand the content of IFRS sustainability standards, clarify the requirements of IFRS sustainability disclosure standards, analyze which information currently complies and which does not, to plan subsequent information acquisition.
Strengthen Systems: Establish Complete Sustainability Information Collection Framework
IFRS sustainability disclosure standards require disclosed information to be "consistent, traceable, and verifiable," so companies must establish a complete sustainability information management system. Specific approaches include:
- Implement data management systems: Use digital tools to centrally collect ESG and financial data, ensuring data entered by different departments can be tracked and has version control functions.
- Establish internal control processes: Develop clear specifications for data sources and approval processes to ensure consistency and transparency in the disclosure process.
- Formulate sustainability information management measures: Include sustainability disclosure responsibilities, operation timelines, and approval processes into internal regulations as the basis for subsequent external verification and regulatory authority audits.
IFRS S1 S2 Countdown! Sustaihub Provides Complete IFRS Sustainability Disclosure Standards Implementation Services
Listed companies facing the new IFRS S1, S2 regulations must prepare comprehensively from awareness to implementation. Sustaihub provides complete and flexible consulting services to help you quickly align with international trends.
Welcome to contact us for more service information!
Strengthen Sustainability Information Internal Controls: Start with Systematic Management
As disclosure requirements become increasingly stringent, compilation methods using Word and Excel make it difficult to manage data sources, lack change records, and easily lead to data errors, information inconsistency, or unclear accountability.
Therefore, many companies have implemented digital system tools, using permission settings, version control, and built-in approval processes to improve compilation efficiency while strengthening information transparency and compliance, helping companies establish a foundation for sustainability information internal controls.
Three key features of Sustaihub's Syber Sustainability Management System enable companies to ensure sustainability information accuracy:
- History records and approval processes: Improve data reliability
- Cross-departmental data integration and real-time updates: Solve data dispersion issues
- Multi-level permission controls: Strengthen sustainability information and data security
Through Syber Sustainability Management System, companies can achieve compliance and improve internal efficiency without expending massive manpower and time, providing comprehensive support for sustainable development. It is the best sustainability report collaboration platform for companies.