The International Sustainability Standards Board (ISSB) released new guidance to help companies disclose climate transition plans under IFRS S2. This guidance builds on the foundational work of the Task Force on Climate-related Financial Disclosures (TCFD)—and brings added specificity that many organizations have been waiting for.
At Greenplaces, we’re paying close attention. As regulatory and investor expectations grow, this update brings clearer direction on what companies need to disclose—and what counts as a credible transition plan.
What is IFRS S2, and who needs to disclose?
IFRS S2 is part of a global climate reporting standard issued by the International Sustainability Standards Board (ISSB), a branch of the International Financial Reporting Standards (IFRS) Foundation—the same body that governs global accounting norms used in 140+ countries. IFRS S2 specifically addresses climate-related disclosures, requiring companies to report how climate risks and opportunities could impact their business and financial performance.
So, who’s affected?
- Jurisdictions that adopt IFRS S2: Countries like the UK, Canada, Australia, and many in the EU and Asia, are actively integrating or aligning with ISSB standards in regulation.Multinational companies: Even if you’re U.S.-based, if you operate in or raise capital in these markets, you may need to disclose.
- Investor-facing companies: Many institutional investors and capital markets now expect IFRS-aligned sustainability disclosures, even in places where it’s not law.
- California SB 261 filers: While not explicitly an IFRS regime, SB 261 requires disclosures aligned with TCFD—on which IFRS S2 is directly based.
Here’s the bottom line: Even if your jurisdiction hasn’t mandated IFRS S2, the bar for credible climate disclosure is rising—and many companies are voluntarily aligning to stay ahead of regulation and investor expectations.
What’s new?
The IFRS Foundation’s June 2025 guidance offers practical instruction for disclosing climate-related transition plans in line with IFRS S2. While the standard has always required disclosures on climate strategy, this release clarifies the how.
For companies working to meet emerging global standards (including SB 261 here in California), it’s a welcome sign of convergence. IFRS S2 takes the core structure of TCFD and strengthens it with specific disclosure requirements—turning recommendations into a baseline for accountability.
What does IFRS S2 require?
If your company has set a climate-related goal or is developing a transition plan, you’ll need to provide detail across four key areas:
1. Governance
- Board and executive oversight of climate risk
- How often climate is discussed and by whom
- Whether executive compensation is linked to climate performance
- Skill-building and training for climate oversight
2. Strategy
- How your climate risks and opportunities shape the business model and value chain
- Whether you have a transition plan and what assumptions it relies on (e.g., tech, policy, or supply chain dependencies)
- Funding strategies for plan implementation
- Impacts on decision-making and capital allocation
3. Risk Management
- Identification and assessment of both physical and transition risks
- How climate risk is integrated into overall risk management processes
4. Metrics & Targets
- Disclosure of Scope 1, 2, and material Scope 3 emissions using the GHG Protocol
- Industry-specific metrics aligned with SASB
- Climate-related targets and progress tracking
These are not optional checklists—they are core financial disclosures under IFRS S2.
How does this relate to TCFD?
IFRS S2 is built directly on the TCFD framework. The pillars—governance, strategy, risk management, metrics & targets—are the same. But while TCFD offered a flexible structure, IFRS S2 adds more precision, especially in areas like Scope 3 disclosure, transition planning, and strategy integration.
TCFD remains an essential starting point and a key part of regulations like California’s SB 261. But for companies ready to move from guidance to compliance, IFRS S2 brings the next level of detail.
What this means for Greenplaces clients
If you’re a U.S. firm with international operations, institutional investors, or CSRD obligations, this is the direction of travel. The global reporting landscape is coalescing around ISSB standards like IFRS S2.
For Greenplaces clients working on:
- Climate transition strategies
- SBTi or CDP alignment
- SB 261 readiness
- Or just building credible Scope 1–3 disclosures
This guidance helps define what “good” looks like—and we’re here to help you meet it.
Our software already supports GHG Protocol-aligned emissions tracking and streamlines disclosure for frameworks like SBTi, CDP, CSRD, and more. Our team of experts can guide you through developing robust, standards-aligned transition plans.
