The Impact of IFRS S1 on Corporate ESG Disclosure: A Comparative Analysis of SMIC and MTR Corporation

Environmental, social, and governance (ESG) issues are becoming increasingly important in corporate investment and financing as the global economy and society evolve. This study focuses on the impact of the IFRS S1 standard issued by the International Sustainability Standards Board (ISSB) in 2023 on corporate disclosure and the standard’s role in improving corporate information’s comparability. By comparing the 2022 and 2023 ESG reports of Semiconductor Manufacturing International and MTR Corporation, this study finds that implementing IFRS S1 promotes a more comprehensive integration of sustainability information in corporate financial reporting. The study notes that the harmonization of international standards, such as the concept of dual materiality proposed by ISSB and the United Nations’ Sustainable Development Goals (SDGs), is influencing ESG disclosure practices globally. The difference in focus between the two companies in ESG reporting reflects their different strategies to address the ESG risks and opportunities. The introduction of the IFRS S1 standard will promote standardization of corporate disclosure, optimize the investor decision-making process, and contribute to the achievement of the broader SDGs.