The Institute of Certified Public Accountants of Kenya (ICPAK) has unveiled the inaugural sustainability standards IFRS S1 and S2 which signal tighter financial disclosures for companies.

These standards, developed by the International Sustainability Standards Board (ISSB), are in line with a bid to promote transparency and reliability of sustainability-related information and climate change disclosures for entities in Kenya.

The implementation is expected to usher in a new era of sustainability-related disclosures, especially among the firms listed on the Nairobi Security Exchange (NSE).

IFRS S1 and IFRS S2 are intended to improve the alignment and interoperability of global environmental, social, and corporate governance (ESG) standards.

ICPAK says the standards create a common language for disclosing the effect of climate-related risks and opportunities on a company’s prospects.

“These new standards are broadening the horizons of financial statements. The broadening is in scope by going into the entire value chains of companies because this is where most of the sustainability risks and opportunities are found,” said ICPAK CEO Grace Kamau.

The institution has partnered with the Pan-African Federation of Accountants (PAFA), the International Accounting Standards Board (IASB), the Financial Sector Deepening (FSD), and the United Conference on Trade & Development (UNCTAD) to oversee the implementation.

On June 26, 2023, ISSB Chair Emmanuel Faber officially launched the Standards at the IFRS Foundation’s annual conference and through a week of events hosted by stock exchanges worldwide.