In conversations with clients, institutional partners, and colleagues from companies across Latin America — including at the recent Peru Sostenible Summit 2026 — I notice an understandable reaction from many when it comes to IFRS S1 and S2: the first priority is to comply.

By comply, I take them to mean getting to the next reporting cycle on time, doing little more than identifying gaps against the information required by the specific line items of IFRS S1 and S2. For many companies operating with limited capacity, that starting point is probably their best effort.

But I find myself wondering whether we’re approaching this challenge from the wrong end.

For years, much of the sustainability information could be organized at the end of the process. Indicators were compiled and a report was published with a defined narrative. IFRS S1 and S2 don’t eliminate that report or make the integrated annual report irrelevant; it’s actually quite the opposite: the IFRS framework itself contemplates that sustainability disclosures may be incorporated into an integrated report. What does change, however, is what needs to exist behind it: a permanent information system over time, reflecting a governance structure for sustainability.

The IFRS S1 and S2 framework signals a deeper shift than simply adding a chapter to a report. It requires that sustainability and climate information enable investors and capital providers to understand the risks and opportunities that may affect a company’s prospects. It also seeks connections between that information and the financial statements, and calls for consistency in areas such as reporting entity and period.

If a company identifies a material climate risk, it will eventually need to explain where that risk sits, how it measures it, what scenarios it considers, what decisions it makes, and how it could affect its business model, cash flows, access to financing, or cost of capital. That information, clearly, is not something you manufacture or generate spontaneously in the final weeks of report preparation. It’s work that must exist long before — reflecting the organization’s maturation in how it approaches sustainability and everything it did to turn the information gathered into a management system.

All of this leads me to a second question, one that may have received less attention: what effect will this transformation have on the sustainability services industry itself?

Until now, there have been relatively clear boundaries — consulting firms that prepared sustainability reports on one side, and technical specialists in quantifying the financial impact of climate risk on the other.

IFRS S1 and S2 are starting to bring those worlds together. Not necessarily because a single organization needs to do everything — in fact, the more likely outcome is that different specialists will need to work in concert. The real challenge, as I see it, lies in integrating those capabilities within the specific operational and organizational realities of each company that takes on this journey.

Here’s how I think about it: a company can have a solid emissions inventory, a sophisticated physical risk model, a materiality matrix, and a strong reporting team — and still not have a sustainability information system. What’s truly essential is that all of those elements connect with the strategy, corporate risk, operations, and finance functions, and that information flows consistently across those areas so it doesn’t have to be rebuilt from scratch every year.

From that perspective, those who can serve as the connective tissue — the ones who get all the pieces working together toward a coherent management system — are the ones who will become increasingly relevant.

In Latin America, many organizations subject to disclosure requirements have limited capacity and are just beginning to build out their sustainability functions, in a context where different jurisdictions are moving at very different speeds in adopting IFRS standards. That’s precisely why proportionality mechanisms are needed — so that regulated organizations feel encouraged to experiment and develop information systems that manage sustainability on a more permanent basis.

At ImplementaSur, we’re contributing to this transition — not as a new market for reporting services, but as an integration and information management challenge. One that requires connecting technical knowledge on climate and sustainability with risk, operations, strategy, data, and finance.

I don’t know which model will ultimately prevail, and I don’t think there needs to be a single answer. What is clear is that none of these capabilities work well in isolation — and that, above all, it’s worth asking the question now, before compliance stops being the main problem.

I’ll leave you with one more question: are we preparing our organizations to simply produce a report, or to sustain a new way of managing sustainability risks and opportunities?