Abstract
The global shift toward standardized sustainability reporting, driven by IFRS S1 and S2, places growing demands on emerging markets to align domestic disclosure practices with international expectations. In Indonesia, existing ESG regulations remain fragmented and only partially integrated with IFRS frameworks. This study evaluates the readiness of Indonesian public companies to adopt IFRS S1 and S2, with particular attention to the adequacy, materiality, and sectoral relevance of ESG disclosures. A qualitative content analysis was conducted on sustainability and annual reports from 22 listed firms across 11 sectors, using stratified sampling by asset size. A total of 113 disclosure items were assessed, drawn from IFRS S1, IFRS S2, and the ISSB’s Industry-Based Guidance. A three-point scale was used to rate disclosure quality, and inter-coder reliability exceeded 90 percent. Findings reveal that while high-asset firms reported more ESG content, many disclosures lacked sector-specific depth. Smaller healthcare firms achieved the highest alignment with IBG expectations, suggesting that legitimacy concerns and ethical identity may influence disclosure more than financial capacity. Symbolic language and generic commitments dominated, with climate-related disclosures notably weak. The study concludes that ESG readiness is not solely a function of regulatory compliance or firm size. Instead, it reflects how global standards are interpreted and translated within national institutions and sectoral logics. These results underscore the need for sector-specific ESG benchmarks and institutional capacity-building. Effective adoption of IFRS S1 and S2 requires not only regulatory alignment, but also contextual understanding, stakeholder engagement, and sustained normative commitment.
Keywords: Climate Governance, ESG Disclosure, IFRS S1, IFRS S2, Institutional Translation, Sectoral Legitimacy.