IFRS Foundation publishes comparison of IFRS S2 and TCFD recommendations

The IFRS Foundation published a comparison showing IFRS S2 Climate-related Disclosures aligns with the TCFD's four core recommendations and eleven recommended disclosures. Companies applying ISSB standards will automatically meet TCFD recommendations, simplifying the disclosure landscape that Indian climate-reporting entities navigate.

The IFRS Foundation published a comprehensive comparison of IFRS S2 Climate-related Disclosures and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, after the Financial Stability Board announced completion of the TCFD's work. The comparison confirms IFRS S2 aligns with the TCFD's four core recommendations and eleven recommended disclosures, meaning companies adhering to the ISSB Standards automatically meet TCFD recommendations and avoid the need for dual compliance across the two frameworks.

The development affects companies preparing climate disclosures and investors relying on them. IFRS S2 introduces additional requirements beyond TCFD, including industry-based metrics disclosure, information on planned use of carbon credits to achieve net emissions targets, and further detail on financed emissions. Companies may still use the TCFD recommendations if they wish, with TCFD remaining an entry point for those transitioning to the ISSB Standards. The Financial Stability Board asked the IFRS Foundation to take over monitoring climate-disclosure progress.

Companies should map existing TCFD-based reporting against IFRS S2 and prepare for the additional requirements on industry metrics, carbon credits, and financed emissions. With IFRS S1 and IFRS S2 finalised, the disclosure landscape is more streamlined, though existing standards and frameworks have not disappeared. Indian entities building climate reporting should treat TCFD as a transition step toward ISSB alignment and monitor IFRS Foundation guidance as oversight shifts from the TCFD.

Key figure — Alignment: IFRS S2 matches TCFD's four core recommendations and eleven disclosures