IFRS S1 and S2 in Qatar: The ISSB Standards Reach the Gulf

Updated 20 October 2026: corrected to show that IFRS S1 and S2 are already mandatory from FY2026 for Main Market listed companies, banks, insurers and QFC firms, not only banks, with Scope 3 deferred to FY2028.

Introduction

The International Sustainability Standards Board (ISSB) has set the global baseline for sustainability and climate disclosure with IFRS S1 and IFRS S2. Qatar is the only GCC state where they are already in effect: Main Market listed companies, banks, insurers and QFC firms apply them for financial years from 1 January 2026, with first reports in 2027 (see ESG disclosure rules in the GCC, country by country for the other five states). This article explains what the standards require, who in Qatar must apply them and how to get ready.

What are IFRS S1 and S2?

IFRS S1 — General Requirements for Disclosure of Sustainability-related Financial Information. S1 sets out how an entity reports the sustainability-related risks and opportunities that could reasonably affect its prospects — covering governance, strategy, risk management, and metrics and targets. It is the umbrella standard.

IFRS S2, Climate-related Disclosures. S2 is the climate-specific standard, building directly on the TCFD recommendations. It requires disclosure of climate-related risks and opportunities, Scope 1, 2, and 3 greenhouse gas emissions, climate scenario analysis, and any transition plan the entity has.

Together, S1 and S2 move sustainability reporting from a narrative exercise into investor-grade, financially material disclosure — connected to the financial statements and built to be assured.

What S2 actually demands

IFRS S2 is where the real work sits. To comply, an entity needs to disclose:

• Greenhouse gas emissions — Scope 1, 2, and the material categories of Scope 3, quantified under the GHG Protocol with a defensible boundary and methodology.
• Climate scenario analysis — how the business performs under different transition and physical-risk pathways, typically using NGFS-aligned scenarios.
• Transition plans: where the entity has one, its targets, the abatement levers behind them, and how climate is integrated into strategy and capital allocation. IFRS S2 requires disclosure of a plan that exists; it does not require the entity to have one.
• Governance and risk management — how the board and management oversee climate-related risk, and how it connects to existing risk frameworks such as ICAAP for banks.

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The hard part of IFRS S2 isn’t writing the disclosure. It’s the connected data architecture and assurance-readiness underneath it.

How it connects to QSE and QFMA

For listed companies, the binding rule comes from QFMA, the securities regulator, not from the exchange. The QFMA Governance Code for Listed Companies (Board Decision No. 5 of 2025) requires an annual sustainability report as per the ISSB standards, and QFMA’s Guidance on Corporate Sustainability Reporting (November 2025) sets out how Main Market companies apply IFRS S1 and S2, with 2026 as the first reporting year. The Qatar Stock Exchange ESG guidance dates from 2016, remains voluntary and is not the binding rule. QFMA also requires the sustainability report to be assured by the company’s external auditor, with ISSA 5000 as the reference standard, and unlike the other two regulators it does not let the first report follow the financial statements. An entity that has built credible QSE-aligned reporting has a head start, but the ISSB standards set a higher bar.

The data architecture challenge

Most organisations can write a climate narrative. Far fewer can produce numbers that an assurance provider will sign. IFRS S2 exposes that gap immediately — it requires emissions and scenario data that is reproducible, consistently calculated, and traceable to source. That is an architecture problem, not a reporting problem, and it is best solved before the first mandatory cycle rather than during it.

How to prepare

1. Build a GHG inventory to S2 standard — Scope 1, 2, and material Scope 3 under the GHG Protocol, with an audit trail.
2. Run climate scenario analysis using NGFS-aligned pathways with GCC-specific overlays; for banks, integrate it with ICAAP.
3. Design the data architecture so emissions, targets, and scenario outputs are reproducible and assurance-ready.
4. Sequence now. FY2026 is the first reporting year and is already under way, with first reports in 2027. Institutions that start now turn the first mandatory report into a controlled production cycle rather than a fire-fight.

Conclusion

IFRS S1 and S2 are now mandatory in Qatar for Main Market listed companies, banks, insurers and QFC firms, with FY2026 the first reporting year. The standards are demanding, especially S2’s emissions and scenario requirements, but they reward early preparation. The organisations that build the data architecture and assurance-readiness now will report with confidence when the first reports fall due in 2027. ESGweise helps Qatari banks and corporates do exactly that, from GHG inventory and climate scenario analysis through to independent assurance.