In a business environment increasingly focused on transparency and sustainable financing, IFRS S1 and S2 have become a strategic element for organizations. On March 25, 2026, the Accounting Standards Board of Peru’s Ministry of Economy and Finance, through Resolution No. 001-2026-EF/30, approved the requirement for companies to disclose environmental and social information whenever it has a direct or indirect financial impact on their results.
Although mandatory implementation will begin on January 1, 2029, companies must be prepared to navigate the transition toward integrating sustainability into their financial reporting. In this regard, we present the most relevant aspects of adopting the IFRS S1 and S2 sustainability standards, issued by the ISSB (International Sustainability Standards Board).
IFRS S1: General Requirements for Sustainability Disclosures
The IFRS S1 aims to ensure that entities prepare reports that accurately reflect how environmental, social, and governance (ESG) factors impact their financial position and operating performance.
The standard establishes a disclosure framework based on governance, strategy, risk management, and targets and indicators. In practice, companies must report on the investments needed to reduce their environmental impact, the sources of financing used, and the impact of these decisions on financial variables such as profitability, liquidity, and cash flows.
Furthermore, IFRS S1 recommends using the sector-specific metrics from the SASB standards as a guide to identify and report sustainability risks and opportunities relevant to each industry. These metrics encompass 77 sector-specific standards that help companies prepare comparable information that is useful to investors and aligned with the ISSB’s sustainability disclosure framework.
IFRS S1: Climate-Related Disclosure
IFRS S1 focuses on how climate change may affect companies and their financial results. This standard complements IFRS S2 and requires entities to report on climate-related risks and opportunities, including extreme events, regulatory changes, and new market demands related to sustainability.
In practice, companies will be required to report information on their CO₂ emissions, energy consumption, and actions to adopt cleaner energy sources. They will also need to explain how much they will invest in these changes, how long it will take to recoup those investments, and how these decisions may impact their costs, operations, and financial performance.
Challenges and Recommendations
Peru joins the list of more than 36 jurisdictions that have adopted or are in the process of adopting IFRS S1 and S2. In light of this, it is essential to understand the challenges involved, one of which is the broad scope of application. The standard stipulates that entities not supervised by the SMV or the SBS, whose annual revenue from ordinary activities is equal to or greater than 2,300 UIT at the end of the previous fiscal year, must apply the sustainability provisions and guidelines.
This means that a large number of medium- and large-sized companies will have to adapt to new financial reporting and sustainability requirements. The impact will be greatest in sectors such as mining, energy, water, and agribusiness, where it will be necessary to report not only the current situation but also risks and future scenarios related to climate change.
At VAG Global by TPC Group, we provide specialized advisory services for the implementation and assurance of IFRS S1 and S2, with the goal of ensuring regulatory compliance, strengthening transparency, and promoting corporate sustainability. We work closely with our clients to improve their risk management, strengthen their internal controls, ensure the reliability of reported information, enhance their reputation, and position them as leaders in sustainability.
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