Draft NFRS S1 and S2 — Sustainability Reporting Readiness in Nepal

Maintain a data dictionary and explain estimates and boundaries. A carbon estimate based on incomplete records should not be presented as independently verified. Distinguish internal readiness, published disclosures and an assurance engagement.

A manufacturing entity begins collecting electricity, fuel and water records by site. It documents meters, invoices, period cut-off, estimates and responsibility. It then assesses which risks and information are relevant under the draft framework and applicable business context. Merely publishing total electricity use does not establish compliance with a future final standard.

Review contracts, supply chain, site risks and financing conditions. Coordinate finance, operations and governance so assumptions used in sustainability information and financial statements can be reconciled. Preserve the draft version used and avoid claiming final compliance.

Check later ASB notices for a final standard, adoption date or regulator instruction. Until a verified final pronouncement establishes otherwise, treat this work as readiness for proposed requirements.

ASB's official notice presents NFRS S1 and NFRS S2 as exposure drafts for stakeholder comments. Preparation can therefore focus on understanding the proposed reporting approach and improving information quality, while keeping draft status clear. An international effective date does not establish a Nepal mandatory adoption date.

A useful starting point is the connection between the business and sustainability-related risks or opportunities that could affect cash flows, access to finance or the cost of capital. This is different from compiling every charitable activity into an annual report. Identify the business issue, the financial implication, the relevant time horizon and the evidence available to management.

A manufacturing business might depend on imported fuel, water availability and a small number of transport routes. The reporting team maps those dependencies to operating costs, production interruptions and planned capital expenditure. It records whether estimates are supported by invoices, operational records, contracts or stated assumptions.

Responsibilities should follow the information. Finance can reconcile expenditure and forecast assumptions; operations can explain physical quantities and disruptions; management can approve risk assessments and plans. Keep definitions consistent between reporting periods and explain changed methods. If an emissions or other metric is incomplete, describe its boundary and limitation rather than presenting a precise number without a defensible calculation.

An energy-efficiency project does not establish that the whole organisation has achieved a sustainability target. Separate the target, plan, actual result and management's estimate of future benefits. A claim about reduced energy use should use a comparable baseline and explain changes in output or operating conditions that affect the comparison.

The board can review a readiness paper identifying the proposed disclosures, available data, missing evidence and responsibility for improvements. That work remains useful even while a standard is a draft. Before describing a disclosure as required in Nepal, confirm final adoption, scope and transition provisions from the actual pronouncement. Draft NFRS 18 and NFRS 19 notices should likewise remain separate from the currently operative presentation framework.