IFRS S2 Climate-related Disclosures

IFRS S2 is effective for annual reporting periods beginning on or after 1 January 2024 with earlier application permitted as long as IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information is also applied.

The objective of IFRS S2 is to require an entity to disclose information about its climate-related risks and opportunities that is useful to users of general purpose financial reports in making decisions relating to providing resources to the entity.

IFRS S2 requires an entity to disclose information about climate-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term (collectively referred to as ‘climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects’).

IFRS S2 applies to:

1. climate-related risks to which the entity is exposed, which are:
   1. climate-related physical risks; and
   2. climate-related transition risks; and
2. climate-related opportunities available to the entity.

IFRS S2 sets out the requirements for disclosing information about an entity’s climate-related risks and opportunities. In particular, IFRS S2 requires an entity to disclose information that enables users of general purpose financial reports to understand:

1. the governance processes, controls and procedures the entity uses to monitor, manage and oversee climate-related risks and opportunities;
2. the entity’s strategy for managing climate-related risks and opportunities;
3. the processes the entity uses to identify, assess, prioritise and monitor climate-related risks and opportunities, including whether and how those processes are integrated into and inform the entity’s overall risk management process; and
4. the entity’s performance in relation to its climate-related risks and opportunities, including progress towards any climate-related targets it has set, and any targets it is required to meet by law or regulation.

In June 2023, the ISSB issued IFRS S2 Climate-related Disclosures, which sets out the requirements for entities to disclose information about their climate-related risks and opportunities. IFRS S2 integrates and builds on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and incorporates industry-based disclosure requirements derived from SASB Standards.

In December 2025, the ISSB issued Amendments to Greenhouse Gas Emissions Disclosures to support entities applying specific greenhouse gas disclosure emissions requirements in IFRS S2, particularly during the implementation phase. The amendments were aimed to reduce complexity, the risk of duplicative reporting and the cost of applying specific greenhouse gas emissions disclosure requirements in IFRS S2, while not significantly reducing the usefulness of information for users of general purpose financial reports.