IFRS S2 Climate‐Related Metrics Disclosure: The Role of Sustainability Committee, External Assurance, and National Human Development

ABSTRACT

This study investigates the influence of the sustainability committee, external assurance, and national human development on climate‐related metrics disclosure aligned with IFRS S2. We conceptualize climate‐related metrics disclosure as hard disclosure because it predominantly comprises quantitative and verifiable climate‐related information. Using hierarchical linear modeling (HLM), we analyze 61,174 firm‐year observations from 10,364 listed companies across 61 countries between 2012 and 2023. Sustainability committees and external assurance are examined as firm‐level factors, while the Human Development Index (HDI) represents the country‐level determinant of climate‐related metrics disclosure. The results show that sustainability committees, external assurance, and country‐level human development are positively associated with climate‐related metrics disclosure aligned with IFRS S2. All three HDI dimension indices, including the life expectancy index, education index, and GNI index, show a positive association with climate‐related metrics disclosure. Moreover, firms most frequently report on greenhouse gas emissions, particularly Scopes 1 and 2, whereas internal carbon pricing remains the least disclosed metric. The findings have implications for corporate governance practices and policymakers. Companies should establish sustainability committees and obtain external assurance to strengthen the credibility of their hard climate disclosures, while governments can enhance national HDI through investment in education, healthcare, and policies that improve living standards to build the institutional conditions that support corporate climate accountability.