Streamlined Climate Disclosure: New guidance helps entities provide consistent, high-quality transition-related disclosures under IFRS S2.
Global Alignment: Builds on UK TPT materials while ensuring compatibility with the ISSB’s global baseline.
Jurisdictional Flexibility: Allows local authorities to tailor additional disclosure requirements without obscuring core financial data.
The IFRS Foundation has published new guidance to help entities disclose climate-related transition information in alignment with IFRS S2 Climate-related Disclosures, aiming to improve the quality, consistency, and comparability of climate transition data.
“This guidance document addresses the fragmentation of disclosures about transition plans—which is costly for both preparers of information and investors—and provides inspiration for entities who are applying IFRS S2,” said Sue Lloyd, Vice-Chair of the International Sustainability Standards Board (ISSB).
The guidance expands on work by the UK’s Transition Plan Taskforce (TPT), which the IFRS Foundation assumed responsibility for in 2024. It provides a framework for reporting on both mitigation and adaptation strategies and reflects feedback from global stakeholder roundtables.
“We have retained a focus on delivering full compatibility with the ISSB global baseline and disclosures about climate-related risks and opportunities affecting an entity’s prospects,” said Lloyd.
While IFRS S2 does not require a company to have a transition plan, it does require disclosure of material sustainability-related risks and opportunities, including those tied to climate transition strategies. The new guidance outlines:
How a company’s transition process aligns with its broader business strategy
What to disclose if a company has adopted targets or strategies for lowering emissions or improving resilience
How jurisdictions can supplement disclosures to meet local stakeholder needs, such as aligning GHG targets with the 1.5°C global warming limit
The document does not change IFRS S2 requirements but aims to support its implementation. The Foundation will monitor how entities apply the guidance and may propose updates in line with its due process.
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“We encourage jurisdictions adopting or otherwise using ISSB Standards to utilise this guidance document to support the provision of high-quality, comparable information about transition plans,” the IFRS Foundation stated.
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