How to Plan IFRS Sustainability Disclosure Standards Adoption: Steps and Recommendations

1. What Is an IFRS Sustainability Disclosure Standards Adoption Plan for Listed Companies?

Latest adjustment (23 September 2026): The Financial Supervisory Commission (FSC) and Ministry of Environment announced a policy adjustment to Taiwan's sustainability disclosure adoption roadmap, reducing mandatory IFRS adoption among TWSE/TPEx-listed companies from approximately 1,970 to 560. The threshold is now paid-in capital of at least NT$2 billion, or emission sources regulated by the Ministry of Environment requiring inventory and verification. Companies below NT$2 billion without regulated sources (approximately 1,410 companies) are exempt from mandatory adoption but must disclose basic climate information. Phase 3 companies need only disclose climate-related information in their first two financial years, and Scope 3 disclosure becomes voluntary. Phase 1 and Phase 2 timelines remain unchanged. The adjustment does not apply to the financial, insurance, or securities and futures sectors. Actual requirements are subject to regulations formally issued by the authorities. For a full overview, see IFRS Phase 3 Adjustment: Mandatory Adoption Reduced from 1,970 to Approximately 560 Companies.

Origins and Purpose of IFRS Sustainability Disclosure Standards

In 2023, the IFRS Foundation issued IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures, formally incorporating sustainability information into the global financial disclosure system. These standards aim to make corporate sustainability disclosures consistent, comparable and reliable, enabling investors to assess long-term resilience and financial risks on a common basis.

For details, see: The Countdown to Mandatory IFRS S1 S2 Disclosure: A Guide to Adopting IFRS Sustainability Disclosure Standards

Taiwan's Regulatory Adoption Roadmap

Under the FSC's policy proposal announced on 23 September 2026, the scope and timeline for TWSE/TPEx-listed companies are:

• Adoption phase 1: Paid-in capital of at least NT$10 billion; applicable for financial year 2026, filing in 2027.
• Adoption phase 2: Paid-in capital of at least NT$5 billion but below NT$10 billion; applicable for financial year 2027, filing in 2028.
• Adoption phase 3: Companies outside the first two phases with paid-in capital of at least NT$2 billion but below NT$5 billion, or Ministry of Environment-regulated emission sources requiring inventory and verification; applicable for financial year 2028, filing in 2029.
• Companies with paid-in capital below NT$2 billion and no Ministry of Environment-regulated sources: No mandatory adoption, but basic climate information must still be disclosed.

To support the transition, the authorities introduced the IFRS Sustainability Disclosure Standards Adoption Plan, comprising four stages: analysis and planning, design and execution, implementation, and adjustment and improvement. This gives companies time to prepare and progressively establish internal controls and data disclosure mechanisms that meet IFRS requirements.

Core Principles of the Adoption Plan

1. Establish governance and accountability: Ensure boards and senior management bear ultimate responsibility for disclosed information.
2. Strengthen data consistency and traceability: Ensure sustainability and financial data share the same source.

Incorporate verification and external assurance requirements: Align with future IFRS audit arrangements.

2. How to Adopt IFRS Sustainability Disclosure Standards

Tasks and timelines for each stage of the adoption plan

Image source: Taiwan Stock Exchange (TWSE), August 2024 IFRS Sustainability Disclosure Standards Adoption Plan

Step 1: Analysis and Planning

Objective: Understand the current position and adoption needs, and establish a foundation for implementation.

At the outset, companies should understand the standards and assess their current position, including:

1. Establish a cross-department IFRS sustainability disclosure project team: Hold a management kickoff meeting to secure board support, form a cross-department team, and convene its first meeting to clarify responsibilities and working arrangements.
2. Conduct an initial gap analysis between existing sustainability information and IFRS Sustainability Disclosure Standards: Compare required disclosures with current disclosures and assess the differences and their implications.
3. Understand the reporting entity required by IFRS S1 and S2: Companies must understand that the reporting entity must match the scope of the consolidated financial statements.
4. Develop an adoption plan: Draft the plan considering the company's operating scale and advice from internal and external professionals.

The priorities at this stage are building consensus and clear planning. Companies should also complete internal training so senior management understands IFRS sustainability governance and accountability requirements.

Step 2: Design and Execution

Objective: Establish systems and processes, and begin data collection and control.

This stage translates initial analysis into formal processes. Key tasks include:

• Identify sustainability-related risks, opportunities and financial effects, and assess material sustainability-related financial information: Information should cover governance, strategy, risk management, and metrics and targets.

For details, see: The Countdown to Mandatory IFRS S1 S2 Disclosure: A Guide to Adopting IFRS Sustainability Disclosure Standards

• Identify and collect the required data: Determine the financial information needed and ensure collected data meets IFRS Sustainability Disclosure Standards and relevant regulations. Consider data sources and schedule collection around sustainability reporting deadlines.

Complete system development and tool deployment at this stage so the company is capable of formal disclosure.

Step 3: Implementation

Objective: Trial disclosures and validate systems and data quality.

Before formal disclosure, companies should run a trial simulating the complete IFRS sustainability reporting process:

• Prepare a trial sustainability information section for the annual report: Prepare the section in accordance with IFRS Sustainability Disclosure Standards and annual report requirements, then use it to improve the reporting process for official publication and filing.

This stage bridges system design and formal disclosure, reducing uncertainty during initial reporting.

Step 4: Adjustment and Improvement

Objective: Begin formal disclosure and continuously improve.

Companies should announce and file their sustainability information sections according to regulatory timelines:

• Publish and file the annual report's sustainability information section: Disclose relevant information in the 2026 annual report's sustainability section under IFRS Sustainability Disclosure Standards and publish and file it together with the 2026 financial statements.
• Review the disclosure framework regularly: Reassess the company's current performance evaluation practices and make appropriate changes.
• Continuously analyse and improve IFRS sustainability information processes, monitor how changes in IFRS Sustainability Disclosure Standards affect disclosure and operations, and regularly review and improve existing processes.
• Assess 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 creation, making sustainability disclosure an important asset for brand trust and investor communication.

3. What Are the Three Main Challenges in Early IFRS Sustainability Disclosure Adoption?

Image source: Compiled by Sustaihub

Insufficient Organisational Momentum: No Clear Timeline or Allocation of Responsibilities

IFRS adoption is a major undertaking. Many companies initially lack momentum because there is no clear direction from senior management, leaving the plan without sufficient support. They lack clear schedules and responsibilities and have not agreed when to start, who should lead, or how to connect with existing ESG reporting processes. Plans therefore remain strategic intentions rather than concrete actions and internal systems, ultimately delaying adoption and undermining disclosure quality.

Limited Understanding: Misconceptions and Information Gaps Around IFRS S1 and S2

Many companies are still trying to understand the standards and mistakenly regard IFRS as merely a new reporting template. In fact, IFRS S1 requires integration of sustainability and financial information, while S2 focuses on climate disclosures and emphasises governance and risk management. Poor understanding of governance, risk management and metric disclosures can prevent companies from meeting IFRS S1/S2 requirements.

System Gaps: Data Collection and Internal Control Processes Are Not Yet Established

IFRS Sustainability Disclosure Standards require consistent, traceable and verifiable data, yet many companies' ESG data remains scattered across employees' computers in different departments without central management.

During disclosure preparation, inadequate internal controls can result in inconsistent sustainability information, untraceable versions or unclear approval processes.

4. How Can Companies Address the Three Main IFRS Adoption Challenges?

Image source: Compiled by Sustaihub

Strengthen Organisation: Form an IFRS Sustainability Disclosure Project Team and Develop an Adoption Plan

Build on the sustainability team by adding finance and accounting, risk management and compliance representatives, with internal audit ensuring procedures are correct. Set completion dates for each stage, report progress to the board quarterly and file implementation results with the authorities within 15 days after each quarter.

Strengthen Understanding: Arrange IFRS Sustainability Disclosure Standards Training

Ensure the project team first understands the standards and their requirements, then analyses which information already meets them and which does not, so it can plan further data collection.

Strengthen Systems: Establish a Complete Sustainability Data Collection Framework

IFRS Sustainability Disclosure Standards require consistent, traceable and verifiable information, so companies need a comprehensive sustainability information management system. Specific measures include:

• Introduce a data management system: Use digital tools to collect ESG and financial data centrally, ensuring inputs from different departments are traceable and version-controlled.
• Establish internal control processes: Define clear rules for data sources and approval workflows to ensure consistency and transparency in disclosure.
• Establish sustainability information management policies: Incorporate disclosure responsibilities, schedules and approval workflows into internal rules as the basis for external verification and regulatory audits.

The Countdown to IFRS S1 and S2: Sustaihub's Comprehensive Adoption Services

TWSE/TPEx-listed companies preparing for IFRS S1 and S2 need comprehensive readiness, from understanding to implementation. Sustaihub provides complete, flexible consulting services to help you align quickly with international developments.

Please contact us to learn more about our services!

Strengthen Sustainability Information Controls Through Systematic Management

As disclosure requirements become more rigorous, preparing reports in Word and Excel makes data sources difficult to manage and lacks change histories, creating risks of data errors, inconsistent information and unclear accountability.

Many companies have therefore adopted digital systems with access permissions, version control and built-in approval workflows. These improve preparation efficiency, transparency and compliance while establishing a foundation for sustainability information controls.

Sustaihub's Syber sustainability management system has three key features that help ensure sustainability information is accurate:

1. Activity histories and approval workflows: Improve data reliability
2. Cross-department data integration and real-time updates: Resolve fragmented data
3. Multi-level access controls: Strengthen sustainability information and data security

With the Syber sustainability management system, companies can achieve compliance and improve internal efficiency without extensive staff time. Its comprehensive sustainability support makes it an ideal collaboration platform for sustainability reporting.

Updated on 6 October 2026. Key updates: phased adoption scope and timelines for TWSE/TPEx-listed companies revised under the 23 September adjustment proposal.

IFRS Consulting IFRS Sustainability Disclosure Standards IFRS Sustainability Standards Implementation Plan