IFRS S1 and IFRS S2 Implementation
IFRS S1 and IFRS S2 implementation for Malaysian organisations.
Build the governance, risk-management, data and reporting processes required to prepare reliable sustainability-related financial disclosures.
Scout360 helps boards, finance teams and sustainability teams translate IFRS S1, IFRS S2 and Malaysia's National Sustainability Reporting Framework into a practical implementation programme suited to their organisation.
For Main Market issuers, ACE Market issuers and large non-listed companies preparing for Malaysia's phased adoption of the ISSB Standards.
- GovernanceBoard and management oversight.
- StrategyEffects on the business model, value chain and decision-making.
- Risk managementHow risks and opportunities are identified, assessed and monitored.
- Metrics and targetsHow performance and progress are measured.
The Standards are applied together. The final disclosure is only the visible output of processes that run all year.
The Standards
What are IFRS S1 and IFRS S2?
IFRS S1 and IFRS S2 are sustainability disclosure standards issued by the International Sustainability Standards Board. They focus on material sustainability-related risks and opportunities that could reasonably be expected to affect an organisation's prospects, including its cash flows, access to finance or cost of capital.
IFRS S1: General requirements
IFRS S1 establishes the overall requirements for sustainability-related financial disclosure. It addresses materiality, connected information, reporting boundaries and the identification of sustainability-related risks and opportunities.
IFRS S2: Climate-related disclosures
IFRS S2 applies specifically to material climate-related risks and opportunities. It covers physical and transition risks, climate resilience, greenhouse gas emissions, financial effects, metrics and targets.
Reliable reporting depends on processes that operate across finance, risk, sustainability and operational teams throughout the year, not on the writing that happens at the end of it.
Applicability
When does your organisation need to implement the Standards?
Malaysia's National Sustainability Reporting Framework uses IFRS S1 and IFRS S2 as its baseline sustainability disclosure standards. Adoption is being phased according to organisation type.
- 1
Group 1
Main Market listed issuers with market capitalisation of RM2 billion and above.
- Reporting periods beginning on or after
- 1 January 2025
- Expected first report
- 2026
- 2
Group 2
Other Main Market listed issuers.
- Reporting periods beginning on or after
- 1 January 2026
- Expected first report
- 2027
- 3
Group 3
ACE Market listed issuers and large non-listed companies with consolidated group revenue of RM2 billion or more for two consecutive financial years.
- Reporting periods beginning on or after
- 1 January 2027
- Expected first report
- 2028
Expected first-report years assume a calendar-year reporting period. Actual publication timing depends on the organisation's financial year and applicable regulatory requirements.
Requirements and transition arrangements may change. Organisations should confirm their applicable obligations for each reporting period.
Climate-first transition relief
Groups 1 and 2 may focus on climate-related risks and opportunities under IFRS S2 for their first two applicable reporting periods. Group 3 may use this climate-first relief for its first three applicable reporting periods.
The transition pathway also provides additional time for Scope 3 GHG emissions disclosure. Organisations should use that period to establish value-chain boundaries, data sources and calculation methodologies rather than waiting until the relief expires.
Malaysia also intends to phase in reasonable assurance over Scope 1 and Scope 2 emissions, beginning with Group 1 for reporting periods starting in 2027, followed by Group 2 in 2028 and Group 3 in 2029. The detailed assurance framework and timing remain subject to the relevant regulatory process.
Why it matters
Why implementation cannot be left until report writing.
The disclosures must connect with financial reporting
IFRS S1 and IFRS S2 use the same reporting entity and reporting period as the financial statements. They also require information about effects on cash flows, access to finance and cost of capital. Finance must therefore be involved in determining materiality and connecting sustainability assumptions with financial information.
Required inputs take time to establish
Climate-risk assessment, scenario analysis, current and anticipated financial effects, Scope 3 data and reporting controls cannot be assembled reliably near the publication deadline. Starting earlier allows methodologies, responsibilities and data limitations to be tested before they become public disclosures.
Transition relief is temporary
The climate-first and Scope 3 transition reliefs reduce the initial reporting burden but do not remove the underlying requirements. The relief period should be used to build the missing governance, risk, data and disclosure processes before the complete requirements apply.
Scope of support
What Scout360 can support.
Scout360 can deliver a complete IFRS S1 and IFRS S2 implementation programme or support selected workstreams according to the organisation's existing capability.
Who this service is for
- organisations preparing their first IFRS S1 and IFRS S2 disclosure;
- reporting teams moving from TCFD or Bursa Malaysia disclosures towards the ISSB Standards;
- organisations that have identified gaps in governance, climate risk, GHG data or financial-effects assessment; and
- finance and sustainability teams that need an implementation partner while retaining internal ownership of reporting.
Readiness assessment and implementation roadmap
Confirm the organisation's reporting pathway, review existing disclosures and processes, assess gaps against IFRS S1 and IFRS S2, and establish a prioritised implementation plan.
Governance, risks and opportunities
Define board and management responsibilities, establish appropriate time horizons, identify material sustainability and climate-related risks and opportunities, and connect the process to enterprise risk management.
Climate scenarios and financial effects
Select appropriate physical and transition scenarios, assess strategic resilience, and identify how material matters could affect revenue, expenditure, assets, liabilities, financing or capital allocation.
Metrics, GHG emissions and reporting controls
Determine relevant metrics, establish Scope 1, Scope 2 and Scope 3 calculation approaches, assign data owners, document methodologies and evidence, and introduce review controls.
Disclosure preparation and internal review
Develop the disclosure structure, coordinate information across responsible teams, draft or review the disclosure, resolve information gaps and support management and board review.
Training and internal capability
Provide board briefings, management workshops and practical training for finance, sustainability, risk and operational teams so the reporting process can be maintained internally.
How the work runs
A practical implementation framework.
1
Confirm applicability
Determine the reporting period, NSRF group, transition reliefs, reporting location and responsible decision-makers.
OutcomeClarity on what applies, when it applies and who needs to be involved.
2
Assess readiness
Compare current governance, risk processes, data and disclosures against IFRS S1 and IFRS S2 requirements.
OutcomeA prioritised gap assessment and implementation roadmap.
3
Establish governance and boundaries
Define oversight, management responsibilities, reporting entities, data owners and internal review controls.
OutcomeClear accountability and a controlled reporting structure.
4
Assess risks, strategy and financial effects
Identify material risks and opportunities, evaluate climate resilience and connect their effects to strategy and financial planning.
OutcomeDisclosures grounded in the organisation's actual circumstances.
5
Build data, metrics and evidence
Establish methodologies, reporting templates, GHG inventories, supporting evidence and review procedures.
OutcomeMore consistent, traceable and review-ready information.
6
Prepare, review and improve disclosure
Develop the disclosure, conduct management and board review, retain supporting documentation and strengthen the next reporting cycle.
OutcomeA more reliable process that improves from year to year.
Platform-enabled implementation
Put the reporting process into practice with Scout360.
Where appropriate, the Scout360 Platform can centralise sustainability data, carbon calculations, supporting evidence and entity or site-level information established through the implementation programme.
- Assign information to responsible data owners.
- Manage Scope 1, Scope 2 and all 15 Scope 3 categories.
- Retain supporting documents and a traceable activity record.
- Track information across entities, sites and reporting periods.
Platform subscription is optional. IFRS S1 and IFRS S2 implementation support can be provided independently.
Where this connects
The workstreams inside an implementation programme.
Common questions
Frequently asked questions.
Malaysia's NSRF provides a climate-first transition relief for specified initial reporting periods. However, the relevant IFRS S1 requirements still need to be considered when preparing IFRS S2 climate-related disclosures.
IFRS S2 includes Scope 3 emissions within its climate-related metrics requirements. Malaysia provides transitional relief, but organisations should begin developing value-chain data and methodologies before the relief expires.
Scout360 can strengthen data, evidence, controls and documentation in preparation for assurance. Independent assurance should be appropriately separated from implementation work and performed under the applicable assurance framework.
Yes. Support can focus on specific needs such as readiness assessment, governance, climate risk, GHG accounting, data controls, disclosure preparation or training.
Prepare before reporting pressure increases.
IFRS S1 and IFRS S2 affect governance, risk management, finance, operations and reporting. Starting before the reporting deadline gives responsible teams time to establish the processes and information behind the disclosure.
We aim to respond within two business days.
Regulatory information last reviewed: 7 August 2026.
Official references: Securities Commission Malaysia: National Sustainability Reporting Framework, and IFRS Foundation: Introduction to the ISSB Standards.