The IFRS Foundation has published a guidance document to help entities applying IFRS S2 Climate-related Disclosures report information about their climate-related transition, including any transition plans. The guidance is intended to support higher-quality and more comparable disclosures and draws on disclosure material developed by the Transition Plan Taskforce, which the IFRS Foundation assumed responsibility for in 2024. The document covers disclosures about any transition plan an entity has, including mitigation and adaptation efforts, and is designed to address fragmented transition plan reporting by providing practical direction for IFRS S2 reporting. It explains that an entity’s climate-related transition is the process through which it pursues targets and deploys actions and resources, within its overall strategy, to respond to climate-related risks and opportunities, and sets out what information is necessary to disclose under IFRS S2 when an entity has a strategy for transitioning to a lower-carbon and/or climate-resilient economy. The IFRS Foundation also notes that IFRS S2 does not require an entity to have a transition plan, but does require disclosure of material information about sustainability-related risks and opportunities that could reasonably be expected to affect its prospects, including information about its climate-related transition. For jurisdictions adopting or otherwise using International Sustainability Standards Board standards, the guidance is positioned as an implementation support tool, with scope for jurisdictions to require additional information provided the sustainability-related financial disclosures remain clearly identifiable and are not obscured. The IFRS Foundation states the guidance does not change IFRS S2 requirements, and it will monitor practice and consider whether application guidance in IFRS S2 needs enhancement, with any potential changes subject to consultation under its due process.

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