IFRS Foundation Releases Guidance on Disclosing Climate Transition Plans Under IFRS S2

The IFRS Foundation has published new guidance to support companies applying the ISSB's IFRS S2 climate standard in disclosing information about their climate-related transition plans and strategies. The publication builds on materials developed by the Transition Plan Taskforce, whose framework the IFRS Foundation assumed responsibility for last year.

The guidance is intended for companies applying IFRS S2, which does not require organisations to have a transition plan but does mandate reporting on material climate-related transition risks and on any transition plans that exist. The document addresses both mitigation and adaptation plans, covers disclosures about companies' strategies for transitioning to a lower-carbon or climate-resilient economy, and aims to reduce fragmentation in how entities disclose transition-related information. The Transition Plan Taskforce released its Disclosure Framework in October 2023 as a reference for companies developing climate transition plans.

The IFRS Foundation noted that 36 jurisdictions have now moved to adopt or use ISSB standards, including 17 that have finalised their approach. As adoption broadens, inconsistency in transition plan disclosures has created costs for both preparers and investors who must interpret divergent formats and levels of detail. ISSB Vice-Chair Sue Lloyd said the guidance addresses 'the fragmentation of disclosures about transition plans' and provides 'inspiration for entities applying IFRS S2 when making disclosures about their climate-related transition plans.' India is among the major economies watching ISSB adoption developments closely.

The guidance is particularly relevant for companies in jurisdictions — including those in Asia and emerging markets — that are in early stages of implementing ISSB standards and need practical support to produce high-quality transition plan disclosures. For Indian companies required to produce BRSR disclosures that include elements aligned with TCFD and potentially ISSB, the IFRS Foundation's guidance offers a practical framework for structuring transition-related content. The document is expected to inform the development of transition plan reporting requirements globally as more regulators formalise ISSB-aligned mandates.

Key figure — 36 jurisdictions adopting or using ISSB standards