I want to acknowledge ESG Business Institute for providing this free online course on the fundamentals of ESG. I have one question. Since IFRS S1 and S2 are new, is full compliance with all requirements mandatory at this stage? In the Ethiopian context, ESG and sustainability practices in financial institutions are still emerging, and the key reporting components, such as governance, risk management, strategy, and metrics and targets, are not yet fully developed. Given this maturity gap, are institutions expected to fully comply with ISSB standards now, or is a phased approach acceptable?
Thank you for the acknowledgment, Tekeber. We hope the course has been beneficial to you.
Regarding your question: IFRS S1 and S2 are not yet mandatory in Ethiopia. However, they have been recognized by the Accounting and Auditing Board of Ethiopia (AABE) and are effective for reporting periods starting on or after January 1, 2024. The ISSB Standards are not automatically legally binding—they require local regulatory adoption to become mandatory. That said, they can be applied voluntarily at this stage.
For more details, please visit: https://aabe.gov.et/sustainability-reporting/
I would say that compliance with ESG should be treated as urgent regardless of enforcewment. All organizations should understand the incremental value of compliance
I agree with you, Samwel. Treating ESG compliance as a priority, even beyond regulatory requirements, is key. Organisations that proactively embed ESG not only manage risks better but also unlock long-term value, enhance stakeholder trust, and stay ahead in a rapidly evolving business landscape. It’s about turning compliance into a strategic advantage.