IFRS Foundation published guidance on disclosures about transition plans

On 23 June 2024, the IFRS Foundation published guidance on the disclosure of information about a entity’s climate-related transition. In particular, the guidance on the disclosure of information about transition plans in accordance with IFRS S2, thereby supporting the implementation of the ISSB standards. It is based on the disclosure-specific material developed by the Transition Plan Taskforce (TPT).

The guidance:

• Describes that an entity’s transition in response to climate change is an ongoing process. In doing so, the entity sets targets, undertakes actions and uses resources to respond to risks and opportunities arising from climate change – and aligns these activities with its overall corporate strategy.
• explains what information an entity shall disclose in accordance with IFRS S2 if it has set a strategy to transition to a climate-friendly and/or climate-resilient business model – for example, by reducing greenhouse gas emissions and adapting the business model to the consequences of climate change.
• provides guidance on the disclosure of climate-related transitions, thereby complementing existing materials in individual jurisdictions or materials issued by other institutions on the creation and content of transition plans.

The guidance does not constitute an amendment to IFRS S2. The IFRS Foundation will continue to monitor the disclosures of companies applying IFRS S2 and assess whether the application guidance in IFRS S2 needs to be improved.