A guide to IFRS’ S1 & S2 sustainability financial disclosure implementation (3), By Innocent Okwuosa
Materiality assessment therefore extends to the financial materiality of sustainability issues around the six capitals of integrated reporting within the context of the interactions between the entity and its stakeholders, society, the economy, and the natural environment throughout the entity’s value chain.
In the implementation of IFRS S1 and S2, one of the documents required by Financial Reporting Council (FRC) of Nigeria during the Phase Two of the implementation (see the Revised Roadmap for Implementation of IFRS S1 & S2 in Nigeria), is the identification and materiality assessment of Sustainability Related Risks and Opportunities (SRRO).
When IFRS S1 (3) talks about SRRO that could reasonably be expected to affect the entity’s access to capital, or cost of capital, IFRS S1 (2) helps us understand the capital to be the six capitals of integrated reporting which are (a) Financial Capital (b) Manufactured Capital (c) Natural Capital (d) Human Capital (e) Intellectual Capital and (f) Social and Relationship Capital.
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