IFRS S1 and S2 in Ghana: Adoption Roadmap and Market Readiness
IFRS Explainer · Sustainability Disclosure
Ghana has adopted the IFRS Sustainability Disclosure Standards and set a phased timeline that runs through 2028. What S1 and S2 require, who must report and when, and what ICAG and WACAR research reveals about how ready the market really is.
The International Sustainability Standards Board (ISSB) issued its first two standards on 26 June 2023: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. Together they give capital markets a single, comparable way to report how sustainability and climate factors affect a company’s prospects. The Institute of Chartered Accountants, Ghana (ICAG) adopted both standards in 2023, and on 28 March 2024 it approved a phased roadmap for their adoption and implementation across the country.
In plain terms, IFRS S1 and S2 ask an entity to disclose, in the same report and at the same time as its financial statements, the sustainability-related risks and opportunities that could reasonably affect its cash flows, access to finance and cost of capital over the short, medium and long term. For Ghanaian preparers, the question is no longer whether this is coming, but how soon, and how ready they are.
IFRS S1 and S2 at a glance
- Standards
- IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; IFRS S2 Climate-related Disclosures
- Issued by
- International Sustainability Standards Board (ISSB), established by the IFRS Foundation in 2021
- Issued on
- 26 June 2023
- Effective
- Annual reporting periods beginning on or after 1 January 2024
- Framework
- Four pillars: governance, strategy, risk management, and metrics and targets, aligned with the TCFD recommendations
- Ghana roadmap
- Approved by the Council of ICAG on 28 March 2024
- Mandatory in Ghana from
- 1 January 2027 for Significant Public Interest Entities; 1 January 2028 for Other Mandatory Adopters
- Market readiness
- Ghana Sustainability Market Readiness Index of 46.6 per cent (ICAG and WACAR research)
Two standards, one objective
For two decades, sustainability information was reported through a patchwork of voluntary frameworks such as the GRI Standards, the CDP, the CDSB and the TCFD recommendations. These frameworks served different purposes, were rarely mandatory, and were not always connected to financial information, which limited how useful they were to investors. The IFRS Foundation established the ISSB in 2021 to bring that fragmented landscape into a single, comparable baseline.
The two standards work as a pair. IFRS S1 sets the overall requirements: an entity must disclose information about all sustainability-related risks and opportunities that could reasonably affect its prospects, in a way that is useful to the primary users of general-purpose financial reports. IFRS S2 then sets out specific requirements for the most pressing of those topics, climate, covering climate-related risks, opportunities, transition plans and scenario analysis.
| IFRS S1 | IFRS S2 | |
|---|---|---|
| Title | General Requirements for Disclosure of Sustainability-related Financial Information | Climate-related Disclosures |
| Scope | All sustainability-related risks and opportunities that could affect the entity’s prospects. | Climate-related risks and opportunities specifically, including physical and transition risks. |
| Purpose | Give investors decision-useful information connected to the financial statements. | Let users assess how climate factors affect financial position, performance, cash flows, strategy and business model. |
The four-pillar framework
Both standards are built on the same four-pillar structure, inherited from the TCFD. Anyone preparing or reviewing a sustainability disclosure should recognise these four headings, because every requirement maps back to one of them.
| Pillar | What it asks the entity to disclose |
|---|---|
| Governance | The board and management structures, roles and processes used to oversee and manage sustainability-related risks and opportunities, and how they are built into the overall governance framework. |
| Strategy | How the entity identifies, assesses and responds to sustainability-related risks and opportunities, how these align with overall business strategy, and the resources allocated to its objectives. |
| Risk management | The processes used to identify, assess, prioritise and manage sustainability-related risks, and how those processes are integrated into wider business decision-making. |
| Metrics and targets | The quantitative and qualitative measures used to track performance, including greenhouse gas emissions, together with the targets set and progress against them over time. |
Who must report, and when
ICAG draws its authority to set reporting standards in Ghana from Section 127(5)(b) of the Companies Act, 2019 (Act 992). Rather than impose immediate mandatory adoption, the Council approved a three-phase roadmap that gives entities time to build the governance, systems and data capability the standards require.
| Phase | Who it covers | Timeline |
|---|---|---|
| Phase 1: Voluntary adoption | Any reporting entity that elects to report ahead of its mandatory date. A readiness assessment was due by 30 August 2024. | Periods beginning on or after 1 January 2024, through to periods ending on or before 31 December 2026. |
| Phase 2: Mandatory adoption | Significant Public Interest Entities first, then Other Mandatory Adopters. | 1 January 2027 for SPIEs; 1 January 2028 for OMAs. |
| Phase 3: Government and not-for-profit | Organisations that apply the IPSAS framework. | Deferred until the IPSASB issues public-sector sustainability standards. |
The most consequential distinction sits inside Phase 2, where mandatory adopters split into two groups with different start dates.
Phase 2 · Group 1
Significant Public Interest Entities (SPIEs)
Mandatory from
2027
Who counts
Listed entities; regulated non-listed entities such as banks, insurers, corporate trustees and registered pension schemes; public limited companies; and holding companies of public or regulated entities. Also oil and gas, mining, refineries, automobile and cement producers, and non-renewable power generators.
Periods from 1 Jan 2027
Phase 2 · Group 2
Other Mandatory Adopters (OMAs)
Mandatory from
2028
Who counts
All other companies incorporated under Act 992, except those classified as SPIEs, government organisations (other than state-owned enterprises already reporting under IFRS), and non-mandatory companies.
Periods from 1 Jan 2028
Scope note · Non-mandatory companies
A smaller, private entity may fall outside the mandatory net. The roadmap defines a non-mandatory company as one without public accountability that has no debt or equity traded in a public market, is not preparing to issue such instruments, does not hold assets in a fiduciary capacity for a wide group, and whose annual revenue is not more than GHS 50 million over the last two consecutive years, or whose total assets are not more than GHS 40 million in the preceding year. These entities are encouraged, but not required, to adopt the standards.
Measuring the market’s readiness
A timeline only matters if the market can meet it. To find out, ICAG and the West African Centre for Accountancy Research (WACAR) ran a mixed-methods study, surveying 241 organisations across 11 sectors and interviewing eight senior executives in depth. The result was the Ghana Sustainability Market Readiness Index (GSMRI), a single weighted score built from the four pillars of the standards.
The index combines governance, risk management, strategy, and metrics and targets, with governance weighted most heavily because it is treated as the foundation on which the others rest.
ICAG and WACAR research
Ghana Sustainability Market Readiness Index
- Governance · weight 0.3048.25 per cent
- Risk management · weight 0.2546.50 per cent
- Strategy · weight 0.2549.25 per cent
- Metrics and targets · weight 0.2041.00 per cent
A score of 46.6 per cent places Ghana in the moderate band. The reading is balanced rather than alarming: no single pillar collapses, and the country is clearly not starting from zero. But it sits well short of the level that would support confident, comparable reporting across the market, which is why the phased timeline matters so much.
The four readiness indicators
Behind the headline number, each pillar tells its own story. The figures below are the survey’s agreement rates, the share of organisations confirming that a given practice is in place.
Governance: 48.25 per cent
Recognition is rising, but structures lag. Only 36.5 per cent of organisations report clearly defined sustainability oversight roles for boards and senior management, and just 21.6 per cent link sustainability key performance indicators to executive remuneration. The sharpest gap is operational readiness for the standards themselves: only 19.1 per cent say they have adequate staff to implement IFRS S1 and S2, and only 17.5 per cent report sufficient training.
Strategy: 49.25 per cent
Strategy is the strongest pillar, yet it still falls below half. Only 29.5 per cent of organisations assess environmental risks across different time horizons during planning, and a striking 19.9 per cent have a well-developed climate-related transition plan, the document IFRS S2 effectively expects climate-exposed entities to produce.
Risk management: 46.50 per cent
Fewer than three in ten organisations thoroughly assess and manage climate-related physical risks (28.6 per cent) or transition risks (26.1 per cent), and roughly the same share are positioned to exploit climate-related opportunities. Across most questions, a large bloc of respondents sit on the fence, which often signals uncertainty about their own organisation’s practices.
Metrics and targets: 41.00 per cent
This is the weakest pillar, and the one IFRS S2 leans on most. Fewer than one organisation in five has set clear overall greenhouse gas emission reduction targets (18.7 per cent), and target-setting for individual emission scopes is lower still: 16.6 per cent for Scope 1, 17.1 per cent for Scope 2 and 16.1 per cent for Scope 3.
Awareness has outpaced action
The most important pattern in the research is a gap, not a deficit. Awareness is high: 89.2 per cent of respondents know about the new standards, 85.9 per cent understand what IFRS S1 requires, and 82.5 per cent know the standards will soon be mandatory in Ghana. Yet only 55.6 per cent can list specific IFRS S2 reporting requirements, and current practice is thin. Just 18.7 per cent have appointed senior management responsibility for sustainability, only 15.8 per cent publish a sustainability report at all, and of those, 14.1 per cent have it assured by a third party.
Most organisations know the standards are coming. Far fewer have built the structures, data and skills to comply with them.
That gap is not a sign of resistance. Perception of the benefits is overwhelmingly positive: 91.7 per cent believe adoption will boost reputation, 89.2 per cent expect it to enhance innovation and long-term success, 80.5 per cent anticipate long-term cost efficiencies, and 78.0 per cent expect improved access to financing. The appetite is there. The capability is what needs building, and more than 80 per cent of respondents say so directly, identifying capacity needs in understanding the requirements (87.5 per cent), strengthening sustainability risk management (89.9 per cent) and improving data systems (87.3 per cent).
What compliance will cost
Compliance carries a price, and organisations expect it to vary widely with their size and complexity. The most common expectation is moderate, but a meaningful minority anticipate a heavy burden.
Expected investment for compliance
Most organisations, 45.6 per cent, expect to invest between GHS 100,001 and GHS 250,000 to comply. Estimates span from as little as GHS 10,000 to more than GHS 1 million, and 19.4 per cent anticipate costs above GHS 500,000. A further 14.1 per cent could not yet put a figure on it, which itself points to how early many entities are in assessing the work involved.
The financial weight is likely to fall hardest on smaller organisations, which is one reason the research recommends sequencing mandatory adoption so that larger, better-resourced entities lead and smaller ones follow with more time and support.
How readiness varies by sector
The national average hides a wide spread. Sectors closest to environmental scrutiny, or whose missions already centre on sustainability, are furthest along; technology and transport, perhaps counterintuitively, sit near the back. The table below shows readiness across two of the pillars where the contrast is sharpest. The Resource Transformation sector, represented by just one organisation in the survey, is omitted as too small for reliable comparison.
| Sector | Governance readiness | Metrics & targets readiness |
|---|---|---|
| Renewable Resources & Alternative Energy | 55% | 57.50% |
| Food & Beverage | 58% | 53.85% |
| NGO and other | 58% | 47.92% |
| Extractives & Minerals Processing | 57% | 46.97% |
| Infrastructure | 45% | 43.59% |
| Financials | 50% | 39.89% |
| Services | 50% | 39.37% |
| Consumer Goods | 47% | 38.54% |
| Health Care | 38% | 36.58% |
| Transportation | 40% | 32.81% |
| Technology & Communications | 35% | 32.29% |
The pattern points to a practical strategy: let the more prepared sectors move first and become reference points, while lagging sectors learn from them. The Transportation and Technology and Communications sectors, in particular, show a clear need for focused support before their mandatory dates arrive.
The implementation challenges
The in-depth interviews with chief finance officers, auditors and other senior stakeholders surfaced a consistent set of obstacles. They are worth naming plainly, because most can be addressed with preparation that starts now.
- Data collection and quality. Gathering complete, accurate and verifiable sustainability and climate data, especially across complex structures and supply chains.
- Lack of expertise. Limited in-house knowledge of sustainability reporting and climate risk assessment, requiring training or external support.
- Technology and systems. Inadequate IT infrastructure to collect, analyse and report the required information.
- Cost implications. Investment in systems, training and assurance that weighs more heavily on smaller organisations.
- Materiality assessment. Judging which sustainability and climate issues are material to the entity and its stakeholders.
- Stakeholder engagement. Understanding and responding to what investors, regulators and others expect to see disclosed.
- Integration with financial reporting. Aligning sustainability disclosures with existing financial reporting processes and timelines.
- Assurance and verification. Building the internal controls, and eventually obtaining the external assurance, needed to make disclosures credible.
How to prepare: reporting and assurance
The roadmap is specific about how sustainability information should appear once an entity reports. Knowing these rules now helps preparers design systems that produce the right output from the start, rather than retrofitting later.
- Placement. Sustainability disclosures go in the annual report, after the directors’ report but before the independent auditor’s report on the financial statements.
- Sign-off. The section is signed by two directors and the Chief Sustainability Officer, or another person designated to perform that function.
- Timing. Disclosures cover the same reporting period and are published at the same time as the financial statements, subject to the available transition reliefs.
- Comparatives. Comparative information for the prior period is required, again subject to transition reliefs.
- Statement of compliance. An entity may describe its disclosures as complying with the standards only if it meets every requirement, and must then make an explicit and unreserved statement to that effect.
- Assurance. Assurance is not mandatory in the first year of adoption, but becomes mandatory from the second year. It must be provided by qualified, independent assurance providers approved by the Council of ICAG.
For most entities, the sensible sequence mirrors the national roadmap: adopt voluntarily where ready, build capability in parallel, and treat the mandatory date as the point by which capability must be proven, not the point at which work begins.
Confirm your category and date
Establish whether you are an SPIE, an Other Mandatory Adopter, or a non-mandatory company, and fix your first mandatory reporting period accordingly.
Build governance first
Assign clear oversight at board and management level and designate responsibility for sustainability reporting. Governance is weighted most heavily in the readiness index for good reason.
Run a materiality and gap assessment
Identify which sustainability and climate topics are material, then map your current practice against the four pillars to expose the gaps.
Invest in data and skills
Stand up the systems to capture sustainability and emissions data reliably, and close the capability gap through training. These were the most widely cited needs across the market.
Set targets and prepare for assurance
Establish credible greenhouse gas reduction targets and a transition plan, and design internal controls so that disclosures can withstand the assurance that becomes mandatory in year two.
Key points to remember
- Two standards, one baseline. IFRS S1 covers all sustainability-related risks and opportunities; IFRS S2 covers climate specifically.
- Four pillars. Every requirement maps to governance, strategy, risk management, or metrics and targets.
- Phased adoption in Ghana. Voluntary from 2024; mandatory for SPIEs from 1 January 2027 and for Other Mandatory Adopters from 1 January 2028; public sector deferred.
- Moderate readiness. The Ghana Sustainability Market Readiness Index stands at 46.6 per cent, with metrics and targets the weakest area.
- Awareness, not capability, leads. High awareness and strong belief in the benefits sit alongside thin current practice and clear capacity-building needs.
- Reporting is defined. Disclosures sit in the annual report, are signed by two directors and the CSO, and require assurance from the second year of adoption.
Conclusion
IFRS S1 and S2 mark a structural shift in how Ghanaian companies will be expected to account for their effect on, and exposure to, a changing climate and a broader sustainability agenda. The ICAG roadmap gives the market a workable runway, and the ICAG and WACAR research gives it an honest mirror: a country that understands the standards and believes in their value, but that still has real work to do on governance, data, skills and targets.
The organisations that fare best will be those that read the 2027 and 2028 dates the way the roadmap intends, as deadlines for proven capability rather than start dates for building it. For Ghana’s accountants and finance professionals, sustainability disclosure is no longer a specialist niche. It is becoming core professional knowledge, and the time to acquire it is now.
Frequently asked questions
What are IFRS S1 and S2?
IFRS S1 and S2 are the first two IFRS Sustainability Disclosure Standards from the International Sustainability Standards Board (ISSB). IFRS S1 sets the general requirements for disclosing sustainability-related financial information, and IFRS S2 sets specific requirements for climate-related disclosures.
Who issued IFRS S1 and S2, and when?
The ISSB, established by the IFRS Foundation in 2021, issued IFRS S1 and S2 on 26 June 2023. They are effective for annual reporting periods beginning on or after 1 January 2024.
When do IFRS S1 and S2 become mandatory in Ghana?
Under the ICAG roadmap approved on 28 March 2024, adoption is voluntary from 2024. It becomes mandatory for Significant Public Interest Entities for periods beginning on or after 1 January 2027, and for Other Mandatory Adopters for periods beginning on or after 1 January 2028.
Which companies must adopt IFRS S1 and S2 first in Ghana?
Significant Public Interest Entities adopt first, from 1 January 2027. These include listed entities; regulated banks, insurers, corporate trustees and pension schemes; public limited companies; and large oil and gas, mining, refining, automobile, cement and non-renewable power companies.
What is the difference between IFRS S1 and IFRS S2?
IFRS S1 covers all sustainability-related risks and opportunities that could affect a company’s prospects. IFRS S2 focuses specifically on climate, including physical and transition risks, transition plans and scenario analysis.
What are the four pillars of IFRS S1 and S2?
Governance, strategy, risk management, and metrics and targets. Every disclosure requirement maps to one of these four pillars, which are drawn from the TCFD framework.
How ready is Ghana for IFRS S1 and S2?
ICAG and WACAR research put the Ghana Sustainability Market Readiness Index at 46.6 per cent, a moderate level. Awareness is high at 89.2 per cent, but practical readiness across governance, risk management, strategy, and metrics and targets still has substantial gaps.
Is assurance on sustainability disclosures required in Ghana?
Assurance is not mandatory in the first year an entity adopts the standards, but becomes mandatory from the second year. It must be carried out by qualified, independent assurance providers approved by the Council of ICAG.
Which companies are not required to adopt the standards?
Non-mandatory companies, broadly private entities without public accountability whose annual revenue is not more than GHS 50 million over two consecutive years, or total assets not more than GHS 40 million in the preceding year. They are encouraged, but not required, to adopt.
How much does IFRS S1 and S2 compliance cost in Ghana?
In the ICAG and WACAR survey, most organisations (45.6 per cent) expected to invest between GHS 100,001 and GHS 250,000, while 19.4 per cent anticipated costs above GHS 500,000.
Key terms
IFRS S1
General Requirements for Disclosure of Sustainability-related Financial Information. The overarching ISSB standard.
IFRS S2
Climate-related Disclosures. The ISSB standard dealing specifically with climate-related risks and opportunities.
ISSB
International Sustainability Standards Board, established by the IFRS Foundation in 2021 to set a global baseline for sustainability disclosure.
GSMRI
Ghana Sustainability Market Readiness Index. A weighted measure of national preparedness across the four pillars, assessed at 46.6 per cent.
SPIE
Significant Public Interest Entity. The first group required to adopt the standards, from 1 January 2027.
OMA
Other Mandatory Adopter. Companies under Act 992 outside the SPIE and exempt categories, required to adopt from 1 January 2028.
TCFD
Task Force on Climate-related Financial Disclosures, whose four-pillar structure underpins IFRS S1 and S2.
Scope 1, 2 and 3
Greenhouse gas emissions categories: direct emissions, emissions from purchased energy, and value-chain emissions respectively.
IFRS S1 and S2 are becoming core knowledge for every chartered accountant in Ghana. MSL Business School prepares ICAG, CITG and CIMA students for a profession where sustainability reporting is now part of the syllabus, not an afterthought.
Explore our ICAG programmes →Based on the IFRS Sustainability Disclosure Adoption Roadmap for Ghana, issued by the Council of ICAG, and on Market Readiness for IFRS S1 and S2 Sustainability Disclosure Reporting Standards Implementation in Ghana, the ICAG and WACAR survey research report. This explainer is for educational purposes and is not a substitute for the full standards, the official roadmap, or professional advice.
