THE IMPACT OF IFRS S1/S2 DISCLOSURE STANDARDS ON FINANCIAL INCENTIVIZATION MECHANISMS FOR ENVIRONMENTALLY SUSTAINABLE PRODUCTION
Abstract
The article examines the systemic interconnections between the IFRS S1 and IFRS S2 disclosure standards adopted by the ISSB, the United Nations Sustainable Development Goals, and the mechanisms of financing environmentally sustainable production. The theoretical and methodological foundations of IFRS S1 and IFRS S2 are revealed as regulatory mechanisms for disclosing sustainability-related information that align non-financial reporting with the architecture of financial statements and provide investors with standardised, comparable, and verifiable data on climate-related risks and opportunities. The systemic linkages between the ISSB disclosure standards, the UN Sustainable Development Goals, and the mechanisms for financing environmentally sustainable production are substantiated, with the Sustainable Development Goals serving as a cross-cutting, integrative dimension that connects the regulatory framework, financial instruments, and the productive capacity of green economy sectors. The financial instruments stimulating environmentally sustainable production are systematised, and their correspondence to the sectors of the green economy is determined, reflecting the differentiated logic of capital allocation across renewable energy, sustainable agriculture, the circular economy, green infrastructure, biodiversity conservation, and clean technologies. The mechanism of transforming IFRS S1/S2 data into specific financial decisions is disclosed. The feedback effect within the sustainable finance system is evaluated, forming a self-sustaining mechanism of green transformation in which each iteration of disclosure, financing, and environmental outcomes reinforces the next, lowers the cost of green capital, and ensures progress toward the Sustainable Development Goals. It is argued that the standards, goals, and financial instruments together form an indissoluble system of interdependencies, in which each element constitutes a functional prerequisite for the others, and the support of this configuration is a structural necessity for the proper functioning of the global climate finance system.
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