Challenges in Implementing IFRS S1 and IFRS S2: Evidence from the Turkish Electricity Generation Sector

The global transition toward sustainability reporting has accelerated following the introduction of IFRS S1 and IFRS S2 by the International Sustainability Standards Board (ISSB). This study examines the main challenges associated with implementing these standards in Türkiye’s electricity generation sector, which is characterized by high carbon intensity and strict regulatory oversight. The electricity generation sector provides an important context for evaluating the applicability of sustainability reporting standards in emerging economies. A qualitative, document-based research design was employed. Reports published by the IFRS Foundation, IOSCO, IAASB, and EFRAG between 2021 and 2024 were analyzed together with the 2023 sustainability reports of twelve electricity generation companies operating in Türkiye. The analysis focused on corporate capacity and governance, data measurement and consistency, assurance mechanisms, and digital reporting infrastructure. The findings indicate progress toward alignment with IFRS S1 and IFRS S2 through the Turkish Sustainability Reporting Standards (TSRS). However, incomplete Scope 3 emissions data, reliance on limited assurance, and insufficient digital reporting infrastructure remain significant challenges. The study highlights the importance of strengthening corporate governance, improving data standards, and enhancing digital reporting systems. Keywords: IFRS S1, IFRS S2, Sustainability Reporting, Assurance, Energy Sector.