IFRS S1/S2 in Taiwan: Adoption Timeline, Scope and Annual Report Preparation
Check the three-phase IFRS S1/S2 adoption timeline for TWSE/TPEx-listed companies and distinguish reporting periods from filing years. Includes the first-phase 2027 disclosure deadline, a water shortage risk data inventory and examples of cross-department preparation.
What to decide after reading If you came for IFRS, SASB, TCFD, GRI, or ESG reporting requirements, the next step is to turn disclosure items into data collection, section assignments, and review workflows.
Table of Contents
- Sustaihub Key Takeaways
- What Are IFRS S1 and S2? Latest Rules and Timeline
- Scope and Timeline
- Disclosure Location and Timing
- How Can Companies Identify Material Sustainability Topics Under IFRS?
- How Should Companies Adopt IFRS Sustainability Disclosure Standards?
- IFRS S1 – Governance
- IFRS S1 – Strategy
- IFRS S1 – Risk Management
- IFRS S1 – Metrics and Targets
- How Can Companies Quickly Find Disclosure Examples?
- How Can Companies Prepare for IFRS S1 and S2?
- 1. An IFRS Sustainability Disclosure Standards Adoption Plan
- 2. IFRS Sustainability Disclosure Standards Adoption Portal
- 3. Seek Support from External Consultants
- Disclosure Preparation Example: Turn Water Shortage Risk into a Reviewable Worksheet
- The Countdown to IFRS S1 and S2: Sustaihub's Comprehensive Adoption Services
- 1. IFRS S1 and S2 Training
- 2. IFRS S1 and S2 Gap Analysis
- 3. IFRS S1 and S2 Materiality Assessment
- 4. ESG Data Collection
- Transparent Sustainability Disclosure Strengthens Competitiveness
Sustaihub Key Takeaways
- Phase 1 companies (paid-in capital of NT$10 billion or more) prepare the annual report sustainability section using 2026 information. According to the Financial Supervisory Commission's (FSC, 金管會) reminder of February 2026, it must be announced and filed together with the annual financial report by 16 March 2027.
- Under the 23 September 2026 policy proposal, sustainability sections for the first two financial years of application may be filed by the annual report deadline (14 days before the shareholders' meeting) at the latest, with simultaneous filing with financial reports from year 3. This adjustment does not apply to the financial, insurance, or securities and futures sectors.
- Phase 3 covers companies outside the first two phases with paid-in capital of at least NT$2 billion but below NT$5 billion, or with emission sources regulated by the Ministry of Environment (環境部); it applies from financial year 2028, with filing in 2029. Only climate-related information is required for the first two financial years, and Scope 3 disclosure becomes voluntary.
- Materiality judgements under IFRS S1 must consider both quantitative and qualitative factors. Quantitative disclosure of financial effects is subject to separate conditions and exemptions; not every sustainability topic must be quantified.
Sustaihub analysed the sustainability reports of 2,023 TWSE/TPEx-listed companies for the 2025 reporting year in the Sustaihub sustainability report database: 45.4% list third-party verification or assurance, 25.5% are assured by accounting firms, and only 2 use “reasonable assurance” (“list” means the verification or assurance provider field in the filed data is populated; it does not mean the assurance covers the entire report). When preparing the annual report sustainability section, companies can compare their current verification arrangements for sustainability information against these figures. Sustaihub's year-by-year statistics also show that in the 2024 reporting year, the number of companies preparing sustainability reports rose from 1,120 to 1,940, while the share listing third-party verification or assurance fell from 59.9% to 43.5% before recovering to 45.4% in 2025; the decline mainly reflects dilution by companies preparing reports for the first time, not existing companies dropping assurance.
What Are IFRS S1 and S2? Latest Rules and Timeline
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 the number of TWSE/TPEx-listed companies required to adopt IFRS Sustainability Disclosure Standards 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 that require inventory and verification. Companies with paid-in capital below NT$2 billion and no regulated emission sources (approximately 1,410 companies) are exempt from mandatory adoption but must still disclose basic climate information. Phase 3 companies need only disclose climate-related information in their first two financial years of adoption, and Scope 3 disclosure becomes voluntary. Phase 1 and Phase 2 timelines remain unchanged. This adjustment does not apply to the financial, insurance, or securities and futures sectors. Final requirements are subject to regulations formally issued by the competent authorities. For a full overview, see IFRS Phase 3 Adjustment: Mandatory Adoption Reduced from 1,970 to Approximately 560 Companies.
To meet investor needs and establish globally consistent sustainability disclosure standards, the IFRS Foundation announced the creation of the International Sustainability Standards Board (ISSB) at COP26 in 2021 to promote integration of sustainability disclosures and financial reporting, improving information quality and comparability.
In June 2023, the ISSB issued the IFRS Sustainability Disclosure Standards:
- S1 General Requirements for Disclosure of Sustainability-related Financial Information: Requires disclosure of all sustainability risks and opportunities that could affect enterprise value.
- S2 Climate-related Disclosures: Focuses on climate, building on the TCFD framework and integrating SASB industry metrics.
The core purpose of IFRS Sustainability Disclosure Standards is to connect sustainability information with traditional financial reporting, enabling investors to assess financial performance alongside sustainability risks and transition opportunities.
IFRS Sustainability Disclosure Standards integrate sustainability reports and financial statements
Source: IFRS Foundation; translated by Sustaihub
Scope and Timeline
Under the policy proposal dated 23 September 2026, the scope and timeline for TWSE/TPEx-listed companies are as follows; financial institutions follow their sector-specific rules:
- Phase 1: Paid-in capital of NT$10 billion or more; applicable for financial year 2026, with filing in 2027.
- Phase 2: Paid-in capital of at least NT$5 billion but below NT$10 billion; applicable for financial year 2027, with filing in 2028.
- Phase 3: Companies outside the first two phases with paid-in capital of at least NT$2 billion but below NT$5 billion, or emission sources regulated by the Ministry of Environment requiring inventory and verification; applicable for financial year 2028, with filing in 2029.
- Paid-in capital below NT$2 billion and no emission sources regulated by the Ministry of Environment: No mandatory adoption, but basic climate information must still be disclosed.
IFRS Sustainability Disclosure Standards adoption timeline for TWSE/TPEx-listed companies (original 2023 roadmap; for Phase 3 scope, refer to the 23 September 2026 adjustment above)
Source: FSC (2023), Roadmap for Taiwan's Adoption of IFRS Sustainability Disclosure Standards
Disclosure Location and Timing
In November 2025, the FSC amended annual report requirements and issued phased applicability and filing requirements for TWSE/TPEx-listed companies. These thresholds are based on paid-in capital. Companies with no-par-value shares or a par value other than NT$10 per share must use the net worth thresholds in the order. Financial institutions should also check their sector-specific requirements.
Phase 1 TWSE/TPEx-listed companies prepare a dedicated sustainability section in their annual reports using 2026 information. According to the FSC's February 2026 reminder, this must be announced and filed together with annual financial reports by 16 March 2027. Under the policy proposal announced on 23 September 2026, sustainability sections for the first two financial years of adoption may be filed by the annual report deadline, 14 days before the shareholders' meeting; simultaneous filing with financial reports begins in year 3. Actual requirements are subject to regulations formally issued by the competent authorities. This adjustment does not apply to the financial, insurance, or securities and futures sectors. This deadline applies to specific entities and years and cannot be applied to every company. Information appearing in both the annual report and a separate sustainability report should be checked for consistency.
Turn this article into your next step
If this article touches disclosure, carbon inventory, or report preparation, use the system or database to check how peers handle it.
How Can Companies Identify Material Sustainability Topics Under IFRS?
Materiality assessments under IFRS S1 consider quantitative and qualitative factors to determine whether information could influence investor decisions. Quantitative disclosure of financial effects is subject to conditions and exemptions; not every sustainability topic must be quantified. The following technology talent shortage example is hypothetical and illustrates how to organise potential impacts on revenue, costs and cash flow. Actual disclosures depend on company data and applicable standards.
When assessing the impacts of potential sustainability topics, including risks and opportunities, companies need to consider both likelihood and magnitude of impact. For example:
- Likelihood: Demand for technology professionals in the AI industry continues to grow, making a future talent gap highly likely.
- Magnitude of impact: A talent shortage could delay product launches, potentially costing approximately NT$80 million in orders and adding around NT$4 million in recruitment costs.
After assessing financial impacts, companies must apply the definition of materiality. Information is material if omitting, misstating or obscuring it could reasonably be expected to influence investor decisions. Companies should consider how these sustainability risks or opportunities affect their financial position and whether withholding the information would influence investors' valuation of the company or investment decisions.
Assessing the materiality of sustainability topics under IFRS S1
Source: Compiled by Sustaihub's consulting team
How Should Companies Adopt IFRS Sustainability Disclosure Standards?
IFRS S1 – Governance
- Core content: Governance processes, controls and procedures used to monitor and manage sustainability-related risks and opportunities.
- Example: Taiwan Cement has established board committees, including the Corporate Sustainability Development Committee and Risk Management Executive Committee, to oversee sustainability-related risks and opportunities. It explains responsibilities, communication mechanisms, implementation results, and considerations for strategy and risk management.
Source: Taiwan Cement 2024 (ROC year 113) Annual Report
IFRS S1 – Strategy
- Core content: Disclose current financial effects, response strategies and potential financial effects of material risks and opportunities.
- Example:
For the material topic of Climate Action and Net-Zero Emissions, Taiwan Cement discloses current financial effects.
Source: Taiwan Cement 2024 (ROC year 113) Annual Report
It also explains Taiwan Cement's strategies and decisions for addressing the topic.
Source: Taiwan Cement 2024 (ROC year 113) Annual Report
It then describes the expected effects of its response measures on financial performance and cash flows over the short, medium and long term.
Source: Taiwan Cement 2024 (ROC year 113) Annual Report
IFRS S1 – Risk Management
- Core content: Processes for identifying, assessing, prioritising and monitoring sustainability-related risks and opportunities.
- Example: Wistron incorporates these into its existing risk management mechanisms, assigns relevant departments to manage the risks and opportunities, and conducts regular reviews and tracking.
Source: Wistron 2024 Climate and Nature Report
IFRS S1 – Metrics and Targets
- Core content: Disclose performance, targets and progress for material information.
- Example: Wistron clearly identifies SBTi as the source of its metrics and absolute emissions as its measurement basis. It sets an interim target of reducing absolute Scope 1 and 2 emissions by 90% by 2030 and reports annual implementation results.
Source: Wistron 2024 Climate and Nature Report
Source: Wistron 2024 Climate and Nature Report
How Can Companies Quickly Find Disclosure Examples?
When preparing sustainability reports or related disclosures, companies often want to refer to the disclosure practices of leading companies. Sustaihub offers the free tool Sustain AI to help companies quickly find relevant examples from peers and industry leaders using keywords.
For example, to find companies whose sustainability reports disclose their SBTi reduction methods, strategies and results, you can use Sustain AI and enter the keyword “SBTi”.
Sustain AI will help identify which companies have disclosed related information and the specific pages in their filed reports.
You can then download the reports and go straight to those pages, accelerating your search for benchmark examples.
Source: Sustaihub official website
How Can Companies Prepare for IFRS S1 and S2?
1. An IFRS Sustainability Disclosure Standards Adoption Plan
To help companies adopt IFRS Sustainability Disclosure Standards smoothly, the Taiwan Stock Exchange (TWSE) requires each company to develop its own adoption plan and submit it to the board and file it with the TWSE and Taipei Exchange (TPEx). The competent authorities have published an “Illustrative Adoption Plan” for companies to reference.
2. IFRS Sustainability Disclosure Standards Adoption Portal
Drawing on Taiwan's experience of adopting IFRS Accounting Standards, the FSC established a task force in August 2023 to promote adoption of IFRS Sustainability Disclosure Standards. Working groups translate standards, develop practical examples and guidance, adjust regulations and strengthen outreach.
The authorities have established the “IFRS Sustainability Disclosure Standards Adoption Portal”, offering these learning resources:
- Traditional Chinese translations of IFRS Sustainability Disclosure Standards
- Practical guidance and examples for IFRS adoption
- Courses and video learning resources from the authorities
3. Seek Support from External Consultants
Professional consultants can provide training, gap analysis, strategic planning advice, materiality identification, data inventories and financial impact assessments. They help establish internal processes, train staff and ensure disclosures meet IFRS S1 and S2 requirements.
Disclosure Preparation Example: Turn Water Shortage Risk into a Reviewable Worksheet
The following data inventory example supports team task allocation. Materiality and final disclosures must still be determined based on the company's circumstances.
- Risk and boundaries: Which facilities and processes could shut down due to water shortages? Identify the relevant entities and reporting period.
- Data and owners: Facility teams compile water use, backup water sources and shutdown records; finance confirms relevant costs, assets and estimation assumptions.
- Assessment and evidence: Distinguish actual from anticipated effects, recording periods, methods, sources and data gaps. Do not enter zero for figures that cannot be estimated.
- Review and follow-up: Assign a reviewer, target completion date and version, retaining the basis for decisions. Recheck when data changes.
Teams can use the IFRS adoption planning steps to schedule their work, then explore organising disclosure data and reviews with Syber.
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 offers complete, flexible consulting services to help you align quickly with international developments.
1. IFRS S1 and S2 Training
If IFRS requirements are unfamiliar, our structured courses help you:
- Quickly understand the core requirements and disclosure priorities of IFRS S1 and S2
- Understand the links between governance, strategy, risk management, and metrics and targets
- Strengthen readiness through industry case studies
2. IFRS S1 and S2 Gap Analysis
Through data interviews, we assess your current sustainability disclosures, analyse gaps against IFRS S1/S2 and provide specific improvement recommendations.
3. IFRS S1 and S2 Materiality Assessment
Through workshops and assessment processes, we help companies:
- Identify and assess sustainability topics
- Produce a specific list of material risks and opportunities
- Assess effects on revenue, costs and cash flows, and check quantitative disclosure requirements and exemptions
4. ESG Data Collection
We provide IFRS-specific data collection forms and process development to help companies:
- Establish systematic information collection mechanisms
- Ensure consistent, verifiable data across departments
- Improve the efficiency of subsequent audits and report preparation
Please contact us to learn more about our services!
Transparent Sustainability Disclosure Strengthens Competitiveness
With this explanation of IFRS Sustainability Disclosure Standards, companies can better understand the requirements and ensure their disclosures meet global investors' expectations.
During the transition, companies still face complex international sustainability reporting frameworks. The Sustaihub report management system lets you customise links between the GRI, SASB, TCFD, IFRS S1 S2 and other frameworks you need to address. Click here to see how ESG digitalisation can help solve your report management challenges.
Updated on 6 October 2026. Key updates: scope, phased timeline and sustainability section filing deadlines revised in line with the 23 September adjustment proposal.
FAQ
View AllWhat is the implementation timeline for IFRS S1 and S2?
TWSE/TPEx-listed companies adopt in phases based on paid-in capital: at least NT$10 billion from 2026, filing in 2027; at least NT$5 billion but below NT$10 billion from 2027, filing in 2028; at least NT$2 billion but below NT$5 billion, or companies outside the first two phases with Ministry of Environment-regulated emission sources requiring inventory and verification, from financial year 2028, filing in 2029. Companies below NT$2 billion without regulated sources are exempt from mandatory adoption but must disclose basic climate information. Companies with special share par values and financial institutions must check their applicable rules separately.
How can companies identify material sustainability topics under IFRS S1?
Assess whether sustainability risks and opportunities could influence investor decisions, considering quantitative and qualitative factors. The talent shortage figures in this article are hypothetical; actual assessments depend on company data and the standards' quantitative disclosure requirements and exemptions.
How does Taiwan Cement apply IFRS S1's governance requirements?
Taiwan Cement established the Corporate Sustainability Development Committee and Risk Management Executive Committee to govern sustainability-related risks and opportunities. It explains responsibilities, communication mechanisms, implementation results and considerations for strategy and risk management.
Turn Sustainability Disclosure into a Collaborative Workflow
Use Syber to manage section ownership, metric data, review records, and disclosure progress, turning IFRS, SASB, and GRI requirements into a team workflow.
How to decide the next stepTurn the disclosure requirements in the article into sections, data sources, and owners first. If collaboration, version control, or verification is involved, then evaluate whether a reporting workflow is needed.