ISSB Climate Standard
IFRS S2: Climate-related Disclosures
Global standard. IFRS S2 is the ISSB’s climate disclosure standard — published 26 June 2023, effective for annual reporting periods beginning on or after 1 January 2024.
TCFD-aligned. Carries the four-pillar architecture (governance, strategy, risk management, metrics & targets) and is adopted into UK SRS S2 by DBT.
Proposed UK mandatory for listed companies from 1 January 2027 — subject to the FCA’s Policy Statement on CP26/5, expected autumn 2026; Scope 3 stays comply-or-explain in year one.
What IFRS S2 is, in one paragraph
IFRS S2 — Climate-related Disclosures — is the global climate disclosure standard issued by the International Sustainability Standards Board (ISSB) on 26 June 2023.
It is effective for annual reporting periods beginning on or after 1 January 2024, with national-level adoption depending on jurisdictional endorsement.
IFRS S2 fully incorporates the TCFD four-pillar architecture (Governance, Strategy, Risk Management, Metrics & Targets) and requires Scope 1, 2 and 3 GHG emissions disclosure under the GHG Protocol Corporate Standard.
The standard cannot be applied without IFRS S1, which provides the architectural concepts S2 relies on.
In the United Kingdom, IFRS S2 is adopted into UK SRS S2 by the Department for Business and Trade (25 February 2026), with the FCA proposing mandatory application for in-scope listed companies from 1 January 2027 under CP26/5.
This page is the dedicated reference for IFRS S2 itself — the ISSB-issued standard, its four-pillar structure, Scope 1/2/3 requirements, scenario analysis, and the December 2025 financed-emissions amendments.
For the UK adoption with its six UK-specific amendments and the 2027 mandatory timeline, see UK SRS S2. For the general (non-climate) sustainability companion, see UK SRS S1. For the FCA Listing Rule mechanics, see the FCA CP26/5 tracker. For implementation pathways, see the UK SRS compliance guide.
"The ISSB Standards mark the 'culmination of the work of the TCFD'. Companies applying IFRS S2 meet the TCFD recommendations."Financial Stability Board, July 2023
How IFRS S2 relates to the TCFD recommendations
IFRS S2 fully incorporates the four TCFD pillars (Governance, Strategy, Risk Management, Metrics & Targets).
The Financial Stability Board confirmed in July 2023 that the ISSB Standards mark the "culmination of the work of the TCFD".
TCFD formally disbanded in October 2023.
From January 2024 the IFRS Foundation took over monitoring of climate-related disclosures.
Companies applying IFRS S2 meet the TCFD recommendations.
IFRS S2 goes beyond TCFD in several specific areas: mandatory industry-based metrics drawing on SASB Standards, planned use of carbon credits, financed emissions for financial-sector entities, and quantified current and anticipated financial effects.
First, IFRS S2 mandates disclosure of industry-based metrics drawing on SASB Standards (now under IFRS Foundation stewardship). TCFD only recommended sector-specific metrics.
Second, IFRS S2 requires disclosure of any planned use of carbon credits to achieve the entity's net emissions targets 1.
Third, IFRS S2 requires disclosure of financed emissions for asset managers, commercial banking and insurance — the targeted ISSB amendments issued December 2025 clarify the boundary 2.
Fourth, IFRS S2 requires quantified disclosure of current and anticipated financial effects on financial position, performance and cash flows.
Fifth, IFRS S2 demands detailed disclosure of climate-resilience assessment uncertainties and the entity's capacity to adjust strategy over time.
Sixth, IFRS S2 requires integration of climate risk management into the entity-level enterprise risk management framework, not as a standalone process 3.
The TCFD four-pillar architecture, applied to climate
IFRS S2 uses the four-pillar architecture introduced by the TCFD: Governance, Strategy, Risk Management, and Metrics & Targets.
Each pillar carries specific disclosure requirements for climate-related risks and opportunities.
This is the same architectural spine UK SRS S1 uses for non-climate sustainability topics.
S2 applies it specifically to climate.
Both standards reuse the materiality, connectivity and value-chain concepts established in S1.
GHG emissions disclosure under IFRS S2
IFRS S2 requires GHG emissions disclosure on the basis of the GHG Protocol Corporate Standard.
Scope 1 and Scope 2 are mandatory; Scope 3 is required where material across the 15 GHG Protocol categories.
For asset managers, commercial banks and insurance, Scope 3 Category 15 covers financed emissions.
The December 2025 ISSB amendments clarify that measurement of financed emissions may be limited to loans and investments and may exclude emissions attributable to derivatives.
Methodology references the GHG Protocol Corporate Accounting and Reporting Standard for Scope 1 and 2, and the Corporate Value Chain (Scope 3) Standard for Scope 3.
| Scope | Coverage | Status under IFRS S2 |
|---|---|---|
| Scope 1 | Direct emissions from owned or controlled sources | Mandatory |
| Scope 2 | Indirect emissions from purchased electricity, steam, heating and cooling | Mandatory (location-based; gross). Contractual instrument information disclosed where relevant. |
| Scope 3 | Indirect emissions in the value chain, across the 15 GHG Protocol categories | Required where material. Category 15 financed emissions required for financials with Dec 2025 boundary clarification. |
GHG Protocol Corporate Value Chain (Scope 3) Standard
The 15 Scope 3 categories in scope under IFRS S2 are the same as the GHG Protocol Corporate Value Chain (Scope 3) Standard 1.
Upstream: 1. Purchased goods and services. 2. Capital goods. 3. Fuel- and energy-related activities. 4. Upstream transportation and distribution. 5. Waste generated in operations. 6. Business travel. 7. Employee commuting. 8. Upstream leased assets.
Downstream: 9. Downstream transportation and distribution. 10. Processing of sold products. 11. Use of sold products. 12. End-of-life treatment of sold products. 13. Downstream leased assets. 14. Franchises. 15. Investments (financed emissions).
For UK preparers, see the UK SRS Scope 3 reporting and GHG Protocol references for the operational detail.
Climate scenario analysis under IFRS S2
IFRS S2 requires entities to use climate-related scenario analysis to assess the resilience of strategy and business model.
The standard does not mandate specific scenarios — entities must use methods commensurate with their circumstances.
Common practice references the IEA Net Zero by 2050 / NGFS / IPCC pathways, plus at least one scenario consistent with limiting warming to a level requiring no significant overshoot — typically a 1.5°C-aligned pathway.
Disclosure must cover significant areas of uncertainty, the entity's capacity to adjust and adapt strategy over time, and the inputs, assumptions and methodologies used.
Three reference sets dominate IFRS S2 scenario practice. The IEA Net Zero by 2050 Scenario models a 1.5°C-aligned pathway with rapid decarbonisation. The NGFS Scenarios (Network for Greening the Financial System) offer six scenarios across orderly, disorderly and hot-house-world transition assumptions, widely used by financial institutions. The IPCC AR6 SSP pathways provide the physical-science backbone for risk assessment.
IFRS S2 requires entities to disclose which scenarios were used, the inputs and assumptions, the time horizons considered, and the significant areas of uncertainty. The standard explicitly requires disclosure of how the entity could adjust its strategy if the modelled future does not materialise.
How the UK has adopted IFRS S2
UK SRS S2 adopts IFRS S2 with six UK-specific amendments published by the Department for Business and Trade on 25 February 2026.
The amendments adjust effective dates, transitional relief, references to SASB, GICS, and connectivity to the UK Strategic Report framework.
The substantive disclosure content is the same.
Under FCA CP26/5, UK-listed companies are proposed to apply UK SRS S2 mandatorily from 1 January 2027, with Scope 3 emissions excluded in year one and comply-or-explain from 1 January 2028.
UK SRS S1 (general sustainability disclosures) follows on comply-or-explain from 1 January 2029.
| Aspect | IFRS S2 (ISSB) | UK SRS S2 |
|---|---|---|
| Issuer | ISSB / IFRS Foundation (26 June 2023) | DBT / UK Government (25 February 2026) |
| Effective date | Annual periods on or after 1 Jan 2024 (jurisdictional adoption) | Available now (voluntary); proposed mandatory 1 Jan 2027 (listed) under FCA CP26/5 |
| Scope 3 in year one | Required where material; ISSB transitional reliefs may apply | Excluded in year one for in-scope listed companies; comply-or-explain from 1 Jan 2028 |
| SASB industry metrics | "Shall" — mandatory | "May" — voluntary |
| GICS classification | Mandatory reference | Removed |
| Connectivity | Connectivity to financial statements required | Same, clarified for the UK Strategic Report framework |
| Materiality basis | Single (financial / enterprise-value) | Single (financial / enterprise-value) |
| Assurance | Not mandated by the standard | Disclose-or-explain under FCA CP26/5; mandatory assurance under separate UK Government consultation |
UK-listed companies in CP26/5 scope would apply UK SRS S2 from 1 January 2027 if the FCA's proposals are confirmed in the autumn 2026 Policy Statement — that is the proposed UK Listing Rule requirement.
Multinationals reporting in multiple jurisdictions may apply IFRS S2 directly where the local regulator endorses ISSB. UK SRS S2 disclosures generally satisfy the corresponding IFRS S2 requirements with the documented amendments. See the UK SRS amendments page for the operational deltas.
IFRS S2 around the world
More than 30 jurisdictions, representing over half of global GDP, have adopted or are adopting the ISSB Standards.
Some adopt the full S1 + S2 set; some adopt climate (S2) only.
The European Union's ESRS E1 climate standard under CSRD is structurally aligned with the TCFD/IFRS S2 four-pillar architecture rather than a direct adoption — companies operating under both regimes can reuse much of the same underlying data.
| Jurisdiction | Adoption mechanism | Status |
|---|---|---|
| United Kingdom | UK SRS S2 (DBT) + FCA Listing Rules (CP26/5) | Voluntary now; proposed mandatory 1 Jan 2027 for listed companies |
| Australia | AASB S2 — phased mandatory regime | Group 1 (largest entities) reports due June 2026 |
| Brazil | ISSB Standards adoption | Phased mandatory adoption announced |
| Canada | CSDS 2 (CSSB / FRAS Canada) | Voluntary, with regulator alignment expected |
| Hong Kong | HKEX listing rule | Phased mandatory adoption |
| Japan | SSBJ Standards (SSBJ S2) | Voluntary, with phased mandatory under FSA discussion |
| Singapore | ACRA / SGX listing rule | Phased mandatory adoption for listed entities |
| European Union | ESRS E1 (under CSRD) — structurally aligned with TCFD/IFRS S2 | Mandatory; double materiality (broader than IFRS S2) |
Why IFRS S2 cannot be applied without IFRS S1
IFRS S2 cannot be applied without IFRS S1 in substance.
S2 is a topic-specific standard for climate disclosures; S1 provides the architectural concepts — materiality, connectivity to financial statements, value chain — that S2 relies on.
An entity applying IFRS S2 must therefore also apply the general requirements in IFRS S1.
IFRS S2 is a topic-specific standard for climate. The materiality lens, the connectivity to financial statements, the value-chain scope used for risk assessment — these architectural concepts come from UK SRS S1 / IFRS S1.
In practice this means even companies focused only on the climate deadline (UK SRS S2 mandatory 2027) must implement the S1 architecture in substance from day one, even though UK SRS S1's own comply-or-explain date is 2029. The UK SRS compliance guide walks through the sequencing.
IFRS S2 — Frequently Asked Questions
The most common questions on IFRS S2, with every answer linking to a primary source or to the matching dedicated page on this site.
Topics covered: what IFRS S2 is, UK mandatory status, the TCFD relationship, UK SRS S2 mapping, Scope 3 detail, scenario analysis, jurisdictional adoption, connectivity to financial statements, and ISSB vs IFRS terminology.
What is IFRS S2?
IFRS S2 (Climate-related Disclosures) is the ISSB's global climate-disclosure standard, issued by the International Sustainability Standards Board on 26 June 2023 and effective for annual reporting periods beginning on or after 1 January 2024 1.
It fully incorporates the TCFD four-pillar architecture (Governance, Strategy, Risk Management, Metrics & Targets) and requires Scope 1, 2 and 3 GHG disclosures under the GHG Protocol. Companies applying IFRS S2 meet the TCFD recommendations 2.
Is IFRS S2 mandatory in the UK?
Not directly. IFRS S2 is adopted into UK SRS S2 by DBT (25 February 2026) 3.
Under FCA CP26/5, mandatory application for UK-listed companies is proposed from 1 January 2027 — subject to the FCA Policy Statement expected autumn 2026 4. Scope 3 emissions move to comply-or-explain from 1 January 2028 after a one-year transitional relief; UK SRS S1 follows on comply-or-explain from 1 January 2029.
What is the difference between IFRS S2 and TCFD?
IFRS S2 fully incorporates the TCFD four-pillar architecture. TCFD formally disbanded in October 2023, with the IFRS Foundation taking over monitoring of climate-related disclosures 5.
IFRS S2 goes beyond TCFD in several specific areas: it requires disclosure of industry-based metrics drawing on SASB Standards, planned use of carbon credits, financed emissions for financial-sector entities, and quantified current and anticipated financial effects 6. See the TCFD to UK SRS transition guide.
What is the difference between IFRS S2 and UK SRS S2?
UK SRS S2 is the UK Government's adoption of IFRS S2 with six UK-specific amendments 7.
The amendments cover UK effective dates, transitional relief, SASB "shall"-to-"may" wording, removal of the mandatory GICS classification requirement, and connectivity to the UK Strategic Report framework. The substantive disclosure content is the same. See UK SRS amendments.
What does IFRS S2 require on Scope 3 emissions?
IFRS S2 requires Scope 3 GHG emissions to be disclosed across the 15 categories of the GHG Protocol Corporate Value Chain (Scope 3) Standard, where the categories are material to the entity 8.
For asset managers, commercial banks and insurers, Scope 3 Category 15 covers financed emissions. The ISSB issued targeted amendments in December 2025 clarifying that measurement of financed emissions may be limited to loans and investments and may exclude emissions attributable to derivatives 9.
Does IFRS S2 require climate scenario analysis?
Yes. IFRS S2 requires entities to use climate-related scenario analysis to assess the resilience of strategy and business model 10.
The standard does not mandate specific scenarios — entities must use methods commensurate with their circumstances, commonly referencing IEA Net Zero by 2050, NGFS or IPCC pathways, plus at least one scenario consistent with limiting warming to a level requiring no significant overshoot. Disclosure must include significant areas of uncertainty and capacity to adjust the strategy.
Which jurisdictions have adopted IFRS S2?
More than 30 jurisdictions, representing over half of global GDP, have adopted or are adopting the ISSB Standards. Examples include the United Kingdom (UK SRS S2; FCA CP26/5 proposed mandatory 2027), Australia (AASB S2; phased mandatory regime, Group 1 reports due June 2026), Brazil, Canada, Hong Kong, Japan and Singapore.
The European Union's ESRS E1 climate standard under CSRD is structurally aligned with the TCFD/IFRS S2 four-pillar architecture rather than a direct adoption.
How does IFRS S2 connect to the financial statements?
IFRS S2 explicitly requires connectivity between climate disclosures and the financial statements — the same reporting entity, the same reporting period, and consistent assumptions, with any differences explained 11.
This includes anticipated and current financial effects on financial position, financial performance and cash flows. In the UK, see the UK SRS compliance guide for how to operationalise this connectivity in practice.
Is IFRS S2 the same as ISSB S2?
Yes. "IFRS S2" and "ISSB S2" refer to the same standard. The ISSB (International Sustainability Standards Board) issued the standard; the IFRS Foundation publishes it as part of the IFRS Sustainability Disclosure Standards 12.
Both names are used interchangeably in industry literature. The full set of issued ISSB Standards is available via the IFRS Sustainability Standards Navigator.
Related guides & references
UK SRS S2 — Climate-related Disclosures
How the UK has adopted IFRS S2 into UK SRS S2 with six UK-specific amendments. Proposed mandatory for listed companies from 1 January 2027.
UK SRS S1 — General Sustainability Disclosures
S1 provides the architectural concepts (materiality, connectivity, value chain) that IFRS S2 / UK SRS S2 climate disclosures rely on.
TCFD to UK SRS Transition Guide
How TCFD disclosures map to IFRS S2 / UK SRS S2, with the December 2025 financed-emissions amendments folded in.