Jim McFie, a Fellow of ICPAK
On 14 November 2024, ICPAK promulgated its “Roadmap for the adoption of IFRS sustainability disclosure standards in Kenya”. More than one year earlier, on 6 September 2023, ICPAK announced its intention to adopt the International Financial Reporting Standards (IFRSs) Sustainability Disclosure Standards, called IFRS S1 (General requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) in Kenya. The International Sustainability Standards Board (ISSB) had issued both IFRS S1 and IFRS S2 in June 2023. On its website, IFRS announced that IFRS S1 is effective for annual reporting periods beginning on or after 1 January 2024 with earlier application permitted as long as IFRS S2 is also applied. Similarly, IFRS S2 is effective on or after the same date provided IFRS S1 is applied.
In ICPAK’s Roadmap, all organizations in Kenya should voluntarily adopt the two standards with effect from 1 January 2024 – as proposed by ISSB. Adoption becomes mandatory for all public interest entities on 1 January 2027. Deloittes points out that the definition of a public interest entity differs in different jurisdictions. In Kenya, a public interest entity (PIE) is an entity that holds assets in a fiduciary capacity whose actions and financial health have a significant impact on the public: as a result, there is heightened regulatory scrutiny of the entity and enhanced accounting standards apply to it. Examples of PIEs are banks, insurance companies, pension funds, companies listed on the Nairobi Securities Exchange, public charitable and religious trusts, Savings and Credit Cooperative Organizations (Saccos), the Central Bank of Kenya, the Social Health Authority, state corporations and the national and county governments.
However, adoption by Public Sector Entities will be determined by ICPAK. Mandatory adoption for large non-PIE entities commences on 1 January 2028 and for SMEs on 1 January 2029.
Demand for sustainability-related disclosures has increased significantly in the last number of years, with many jurisdictions making such disclosures mandatory. In response, new international reporting, assurance and ethical standards have been developed, with widespread global adoption expected. As the global accountancy profession evolves, the International Federation of Accountants (IFAC) and its member organizations, including ICPAK, are committed to equipping professionals with the skills and competencies needed to deliver high-quality sustainability-related information and services. By uniting and supporting its members, IFAC ensures the profession remains a trusted source of integrity, transparency, and expertise worldwide.
To meet these evolving expectations, the accountancy profession must ensure professionals have the right skills and competences to deliver high-quality, sustainability-related information and services. IFAC has updated the International Education Standards to embed sustainability—spanning analysis, reporting, and assurance—across aspiring professional accountants’ training.
The revisions to these foundational education standards establish a global baseline of sustainability competence, ensuring professional accountants worldwide are prepared to implement sustainability-related disclosure and assurance standards. This includes standards issued by the International Auditing and Assurance Standards Board (IAASB), the International Ethics Standards Board for Accountants (IESBA), and the International Sustainability Standards Board (ISSB), as well as those under development by the International Public Sector Accounting Standards Board (IPSASB).
As sustainability data and information become integral to corporate decision making and transparency, it is crucial that professional accountants are equipped with the necessary skills to provide high-quality reporting and assurance that meets the needs of management, investors, regulators, and other stakeholders.
On 13 March 2025, the International Federation of Accountants (IFAC) announced revisions to the International Education Standards (IES), incorporating sustainability competence into the training of professional accountants. It is always wise to remember that IFAC unites and connects professional accountancy organizations across the whole globe. These revisions to the International Education Standards embed sustainability throughout aspiring professional accountants’ training. These updates reinforce the accountancy profession’s role in supporting high-quality sustainability reporting and assurance while upholding integrity and professional quality. Revisions have been made to International Education Standard IES 2 (Revised): Initial Professional Development – Technical: it prescribes the learning outcomes for technical competence; that is, the ability to apply professional knowledge to perform a role to a defined standard. Competence IES 3 (Revised): Initial Professional Development, Professional Skills, prescribes the learning outcomes for professional skills. IES 4 (Revised): Professional Values, Ethics and Attitudes, prescribes the learning outcomes for professional values, ethics, and attitudes. These are the characteristics that identify professional accountants as members of a profession. They include the principles of conduct (e.g., ethical principles) generally associated with and considered essential in defining the distinctive characteristics of professional behavior. IFAC points out that the revised IESs take an Integrated Sustainability Approach: Sustainability concepts are embedded throughout the IES learning outcomes addressing initial professional development, ensuring professional accountants are able to connect financial and sustainability data and information. In addition, a New Assurance Competence Area has been introduced. It brings in learning outcomes that allow accountants to develop a strong foundational understanding of assurance fundamentals.
Another addition is a strengthened Business Acumen Focus: this enhances accountants’ ability to assess sustainability impacts on business models, value chains, and organizational strategy. Emphasis is now placed on enabling behavioral competencies; this emphasis reinforces skills such as decision-making, adaptability, and collaboration.
There is also an expansion of explanatory materials, which provides additional guidance to facilitate implementation by professional accountancy organizations, universities, and training programs. These updates to IES 2, 3, and 4 establish a global baseline for sustainability competence, ensuring accountants are equipped to handle sustainability-related disclosure and assurance standards. In addition, IFAC has modernized IES 6, which deals with the formal assessment of professional competence. This has introduced principles of integrity and authenticity, updating the principle of equity, and providing guidance on hybrid and remote assessments.
The revisions aim to maintain integrity and professional quality within the accountancy profession. The updated standards align with those issued by the International Auditing and Assurance Standards Board, the International Ethics Standards Board for Accountants, the International Sustainability Standards Board, and those under development by the International Public Sector Accounting Standards Board.
These revisions update the global baseline for professional accountancy education, equipping future accountants to apply sustainability-related reporting and assurance standards effectively.
“IFAC and our members work together to shape the future of the profession through learning, innovation, a collective voice, and a shared commitment to the public interest,” said Lee White, IFAC Chief Executive Officer. “These revisions to the education standards ensure that professional accountants worldwide develop the right competencies to implement sustainability reporting and assurance standards effectively.”
IFAC urges stakeholders to prepare for the implementation of these standards, promoting early adoption before the 1 July 2026 effective date.
