The short version
ICPAK's roadmap for adopting the IFRS Sustainability Disclosure Standards sets the direction: public interest entities will be required to publish disclosures aligned to IFRS S1 and IFRS S2 for accounting periods beginning on or after 1 January 2027. For a company with a December year-end, that means the financial year starting January 2027 — with the first report landing in 2028.
That sounds distant. It isn't. The data you will report in 2028 is being generated by systems you are running today, and the comparative-period expectations mean the quality of your 2026 and 2027 data matters.
Ahead of that, the Nairobi Securities Exchange and ICPAK issued a joint market advisory requiring every listed company to submit a Sustainability Reporting Readiness Assessment — covering board oversight, strategy integration, risk management processes and emissions measurement systems — and to engage an independent assurance provider. If your organisation has not yet completed that step, it should be the immediate priority.
Who is actually caught
The public interest entity definition is broader than many boards assume. It includes:
- Companies listed on the Nairobi Securities Exchange
- Commercial banks regulated by the Central Bank of Kenya
- Insurance companies regulated by the Insurance Regulatory Authority
- Retirement benefit schemes and pension funds
- Fund managers and collective investment schemes
- Deposit-taking SACCOs
If you are not on that list, do not assume you are unaffected. Banks and insurers that must report their financed and underwritten emissions will start requesting data from the businesses they lend to and cover. In practice, obligation flows downstream through the value chain long before it arrives as regulation.
What S1 and S2 each ask for
IFRS S1 is the general standard. It requires you to disclose the sustainability-related risks and opportunities that could reasonably be expected to affect your cash flows, access to finance or cost of capital — across governance, strategy, risk management, and metrics and targets.
IFRS S2 narrows to climate. It requires the same four-pillar structure applied to climate-related risk, and it is where most of the technical work sits: greenhouse gas inventories prepared in line with the GHG Protocol, including Scope 3 where material, plus climate resilience analysis.
The critical shift is that this is financial reporting, not a marketing brochure. The information sits alongside the financial statements, on the same timeline, subject to assurance. Sustainability data now has to survive the same scrutiny as a revenue figure.
Four things worth doing in the next six months
- Complete the readiness assessment honestly. The value is in an accurate picture of your gaps, not a clean-looking submission. A flattering self-assessment simply delays the problem to a point where it is more expensive to fix.
- Build the greenhouse gas inventory now. Scope 1 and 2 are usually achievable in a few weeks from utility and fuel records. Scope 3 takes far longer because it depends on supplier and logistics data you have to request, chase and validate. Starting this in 2027 is starting too late.
- Fix data ownership before data collection. The most common failure we see is not missing data — it is data with no named owner, no defined boundary and no audit trail. Assurance providers test the process, not just the number.
- Get the board genuinely engaged. S1 and S2 both require disclosure of governance and oversight. A board that cannot describe how it supervises climate risk creates a disclosure gap that no amount of consultant drafting can close.
The honest difficulty
For most Kenyan organisations the binding constraint is not willingness — it is capacity. Finance teams are already stretched, sustainability sits with someone who has another full-time role, and the data is scattered across sites and spreadsheets.
The workable response is sequencing. Establish the boundary and governance first, then Scope 1 and 2, then a phased Scope 3 build focused on the categories that are material to your sector. Attempting everything at once is how organisations end up with a report that reads well and cannot be assured.