The standards
Does it apply to you
Doing it
The basics
In UK reporting
TCFD
Climate topics
Scope and dates
Qualifying
Complying
IFRS and ISSB
ESRS and CSRD
Comparing them
Consultancy
Software
About this guide
IFRS S2 · December 2025 text · read at the paragraph
IFRS S2 connects governance, strategy, risk management, and metrics and targets for material climate-related information.
Sources: IFRS S2 ¶¶C1, C1B; ISSB issuance, 26 June 2023; ISSB amendments; DBT publication; FCA PS26/19.
The Standard in numbers
IFRS S2 connects governance, strategy, risk management, and metrics and targets for material climate-related information.
Module 01 / 03
Identify governance and management roles.
Module 02 / 03
Explain risks, strategy and resilience.
Module 03 / 03
Disclose metrics, methods and target progress.
IFRS S2 Climate-related Disclosures is the ISSB’s climate standard, set out in paragraphs 1 to 37, paragraphs 29A to 29C and three appendices.
Its own opening note says “all paragraphs have equal authority”, so a summary is no substitute for the number.
This page reads the paragraphs people look up — ¶6, ¶10, ¶22, ¶29(a) and ¶29(f) — and then shows what the UK changed when it made the standard UK SRS S2.
Sources: IFRS S2, December 2025 text; TCFD Final Report; GHG Protocol Scope 3 Standard.
In one screen
This guide follows IFRS S2 as amended in December 2025 and distinguishes its dates from UK endorsement and application.
Read the applicable IFRS S2 edition.
Read UK SRS S2's endorsed differences.
Identify the jurisdiction's reporting rule.
IFRS S2 applies to climate-related physical risks, climate-related transition risks and climate-related opportunities (¶3).
The test is whether the risk or opportunity could reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term (¶2).
It organises the disclosures into governance, strategy, risk management, and metrics and targets.
It requires scenario analysis for climate resilience (¶22) and absolute gross Scope 1, 2 and 3 emissions (¶29(a)).
It is applied with IFRS S1, which sets the general requirements; the pair are explained together on IFRS S1 and S2.
The ISSB issued it in June 2023, and the UK version is UK SRS S2.
Everything here is the December 2025 text, the version UK SRS S2 is built on.
The June 2023 text carries the same body numbers and a different Appendix C, so a transition-paragraph reference taken from it can point at the wrong relief.
The requirements
The standard's paragraph sequence moves from decision-makers through business response to performance measurement.
Paragraphs 5–7.
Paragraphs 8–26.
Paragraphs 27–37.
Paragraph 6 asks the entity to identify the governance body or individual responsible for oversight, and to describe management’s role, including whether it is delegated to a specific position or committee.
3 numbered paragraphs: ¶¶5 to 7
Paragraph 10 asks four things about every risk and opportunity, paragraph 14(a)(iv) asks about any transition plan, and paragraph 22 requires scenario analysis to assess resilience.
16 numbered paragraphs: ¶¶8 to 23
Paragraphs 24 to 26 ask how risks are identified, assessed, prioritised and monitored, and whether the process is integrated into the entity’s overall risk management.
3 numbered paragraphs: ¶¶24 to 26
Paragraph 29 lists seven cross-industry categories from (a) to (g), paragraph 32 adds industry-based metrics, and paragraphs 33 to 37 cover targets, including carbon credits at 36(e).
11 numbered paragraphs: ¶¶27 to 37, plus 29A to 29C
Source line: IFRS S2, December 2025 text, ¶¶5–37, counting numbered body paragraphs in each range.
The dates
IFRS S2's original date, its amendment date and the UK's reporting-period trigger serve different purposes.
Paragraph C1 sets the 1 January 2024 date, and paragraph C1B sets the later one for the December 2025 amendments.
UK SRS S2 has no effective date, because the government removed it, so a UK reader asks which date the FCA sets.
For listed companies in UKLR 6, 14, 15, 16 and 22 the FCA’s final rules apply on a comply-or-explain basis to accounting periods beginning on or after 1 January 2027.
The two 1 January 2027 dates coincide by accident of calendar, not by design, and they sit in different instruments.
The map
The same standard connects specific disclosure requests rather than offering one generic climate-report template.
Module 01 / 04
Governance body and management responsibilities.
Module 02 / 04
Climate risks, opportunities and horizons.
Module 03 / 04
Resilience and scenario analysis.
Module 04 / 04
Cross-industry metrics.
| Paragraphs | Block | What it asks for |
|---|---|---|
| ¶¶1–2 | Objective | Disclose climate-related risks and opportunities that could reasonably be expected to affect cash flows, access to finance or cost of capital |
| ¶¶3–4 | Scope | Physical risks, transition risks and opportunities; anything that could not affect prospects is out |
| ¶¶5–7 | Governance | The body or individual with oversight, and management’s role |
| ¶¶8–23 | Strategy | Risks and opportunities, business model, transition plan, financial effects, resilience and scenario analysis |
| ¶¶24–26 | Risk management | How risks are identified, assessed, prioritised and monitored |
| ¶¶27–37 | Metrics and targets | Seven cross-industry categories, industry-based metrics, targets and carbon credits |
| ¶¶29A–29C | Added December 2025 | Category 15 financed-emissions limitation and the Category 15 subtotal |
| Appendices A–C | Definitions, application guidance, effective date and transition | Appendix C is where the June 2023 and December 2025 texts differ |
The same numbering carries into UK SRS S2 for the body paragraphs, so a body reference is portable between the two standards.
The appendices were renumbered in the UK version, so an Appendix C reference is not portable; the table in the Annex A section below shows where each one went.
The Standard’s own navigator page records the issue in June 2023 and the issuance announcement is dated 26 June 2023.
The body that issued it is the International Sustainability Standards Board, covered on our ISSB guide.
Look it up
Use the paragraph finder to connect a reporting question with the actual clause and its context.
Identify the information needed.
Read the requirement and relevant application guidance.
Check whether endorsement changes the wording.
| ¶2 | Strategy | The test: effects on cash flows, access to finance or cost of capital over the short, medium or long term. | Same text |
| ¶6 | Governance | The governance body or individual with oversight, and management’s role. | Same text |
| ¶6(a)(v) | Governance | Whether and how climate metrics are in remuneration policies; read with ¶29(g). | Same text |
| ¶10 | Strategy | Describe, classify (physical or transition), place in time and define the horizons. | Same text |
| ¶12 | Strategy | Refer to and consider the industry-based disclosure topics. | UK SRS S2 ¶12: “may” |
| ¶14(a)(iv) | Strategy | Any climate-related transition plan the entity has, with key assumptions and dependencies. | Same text |
| ¶21 | Strategy | Where quantitative information is not provided, explain why and give qualitative information. | Same text |
| ¶22 | Strategy | Use scenario analysis to assess climate resilience, commensurate with circumstances. | Same text |
| ¶¶24–26 | Risk management | How risks are identified, assessed, prioritised and monitored, and whether integrated into overall risk management. | Same text |
| ¶29(a) | Metrics and targets | Absolute gross Scope 1, 2 and 3 emissions in tCO2e, measured under the GHG Protocol (2004). | Same text |
| ¶29(b)–(d) | Metrics and targets | Amount and percentage of assets or activities vulnerable to transition and physical risks, or aligned with opportunities. | Same text |
| ¶29(e) | Metrics and targets | Capital expenditure, financing or investment deployed towards risks and opportunities. | Same text |
| ¶29(f) | Metrics and targets | Whether and how a carbon price is applied in decisions, and the price per tonne used. | Same text |
| ¶29(g) | Metrics and targets | Whether climate is factored into executive pay, and the percentage linked to it. | Same text |
| ¶29A–29C | Metrics and targets | Category 15 limited to financed emissions; derivatives explained; total and subtotal disclosed. | ISSB amendment, not a UK change |
| ¶32 | Metrics and targets | Industry-based metrics associated with one or more disclosure topics. | UK SRS S2 ¶32: “may” |
| ¶¶33–35 | Metrics and targets | Each target: metric, scope, period, base period, milestones; third-party validation; progress. | Same text |
| ¶36(c) | Metrics and targets | A net target needs its associated gross target disclosed separately. | Same text |
| ¶36(e) | Metrics and targets | Planned use of carbon credits: reliance, verifying scheme, type, credibility. | Same text |
| ¶C1 | Appendix C | Effective for annual periods beginning on or after 1 January 2024. | No effective date in UK SRS S2 |
| ¶C1B | Appendix C | The December 2025 amendments apply from 1 January 2027; earlier application permitted. | Already included in UK SRS S2 |
21 of 21 rows
Each row is one provision of the December 2025 text; UK differences are from DBT Annex A.
Source line: IFRS S2 as amended December 2025; UK differences from DBT Annex A.
Structure
The four pillars organise disclosure but do not replace the detailed requirements beneath each heading.
Module 01 / 03
Processes, controls and oversight.
Module 02 / 03
Exposures, responses and risk processes.
Module 03 / 03
Measures, methods and progress.
Governance, strategy, risk management, and metrics and targets are the four areas the TCFD set out in 2017.
They are not evenly sized: strategy runs to sixteen numbered paragraphs, governance and risk management to three each.
The IFRS Foundation’s own word for the relationship with the TCFD is “consistent with” the four core recommendations and eleven recommended disclosures.
The pillars are explained for the UK standard on the UK SRS four pillars, and for the framework they came from on the four pillars of the TCFD framework.
| Pillar | Paragraphs | Count |
|---|---|---|
| Governance | ¶¶5–7 | 3 |
| Strategy | ¶¶8–23 | 16 |
| Risk management | ¶¶24–26 | 3 |
| Metrics and targets | ¶¶27–37 | 11, plus 29A–29C |
Governance
Paragraph 6 asks who oversees climate matters and how responsibilities, skills and information support that oversight.
Identify the responsible board, committee or individual.
Describe delegated responsibilities and controls.
Explain how oversight receives relevant information.
Paragraph 5 states the objective; paragraph 6 is the operative list; paragraph 7 tells the entity not to duplicate what it already discloses under IFRS S1.
Paragraph 6(a) asks the entity to identify the body or individual responsible, not to describe oversight in the abstract.
It then asks five things about that body, and the fifth reaches executive pay.
Paragraph 6(a)(v) cross-refers to paragraph 29(g), which asks for the percentage of executive remuneration linked to climate, so the governance disclosure and the metric have to agree.
Paragraph 7 points to IFRS S1 ¶B42(b): where sustainability oversight is integrated, the entity gives integrated governance disclosures rather than separate ones for each topic.
The UK text of paragraph 6 is unchanged; the board’s side of it is treated on UK SRS S2.
| Limb | What the entity discloses |
|---|---|
| 6(a) | Identify the governance body or individual responsible for oversight of climate-related risks and opportunities |
| 6(a)(i) | How responsibilities are reflected in terms of reference, mandates, role descriptions and policies |
| 6(a)(ii) | How it determines whether the right skills and competencies are available or will be developed |
| 6(a)(iii) | How and how often it is informed about climate-related risks and opportunities |
| 6(a)(iv) | How it takes climate into account when overseeing strategy, major transactions and risk management, including trade-offs |
| 6(a)(v) | How it oversees targets and monitors progress, including whether performance metrics are in remuneration policies (see ¶29(g)) |
| 6(b)(i) | Whether management’s role is delegated to a specific position or committee, and how it is overseen |
| 6(b)(ii) | Whether management uses controls and procedures to support oversight, and how they integrate with other functions |
Strategy · the one people ask about
Paragraph 10 identifies climate risks and opportunities before later paragraphs explain their effects and responses.
Module 01 / 03
Identify the climate-related matter.
Module 02 / 03
Distinguish physical and transition exposures.
Module 03 / 03
Explain short, medium and long-term definitions.
Paragraph 10 sits inside the strategy pillar and asks four things about every climate-related risk and opportunity the entity identifies.
Summaries on the open web usually carry (a) and (c) and drop the other two.
Limb (b) is a classification duty, risk by risk: physical or transition, both terms defined in Appendix A.
Limb (d) is the one that gives the rest its teeth.
The Standard does not define short, medium or long term; it requires the entity to define them and to tie the definitions to the horizons it actually plans on.
“Prospects” is the Standard’s shorthand for what paragraph 2 names: effects on cash flows, access to finance or cost of capital.
Paragraph 11 sets the evidence standard: all reasonable and supportable information available at the reporting date without undue cost or effort, including past events, current conditions and forecasts.
Paragraph 12 requires the entity to refer to and consider the industry-based disclosure topics in the Industry-based Guidance, which derives from the SASB Standards.
In UK SRS S2 that “shall” became “may”, one of the rows on UK SRS against IFRS S1 and S2.
¶10 — “Specifically, the entity shall:”
the climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects.
for each risk, whether it is a physical risk or a transition risk.
for each risk and opportunity, the time horizons — short, medium or long term — over which effects could occur.
and link the definitions to the planning horizons used for strategic decision-making.
Resilience
Paragraph 22 requires scenario analysis using an approach commensurate with the entity's circumstances.
State scenarios, assumptions and horizons.
Explore effects on the business model and strategy.
Explain capacity to adapt and relevant uncertainty.
Paragraph 22 says the entity “shall use climate-related scenario analysis to assess its climate resilience using an approach that is commensurate with the entity’s circumstances” (IFRS S2 ¶22).
It is not an option offered to larger entities; it is the method for every entity applying the Standard.
What scales is the depth: paragraph B8 asks for an approach that considers all reasonable and supportable information available without undue cost or effort.
Paragraph 22(a) asks for the result — the implications for strategy and business model, the significant uncertainties, and the capacity to adapt.
Paragraph 22(b) asks how and when it was done, which is a disclosure about process as well as output.
Paragraph 22(b)(ii) adds the key assumptions: climate policy in the entity’s jurisdictions, macroeconomic trends, national or regional variables, energy usage and mix, and technology.
Paragraph 22(b)(iii) asks for the reporting period in which the analysis was carried out, which stops an old scenario being presented as current.
“We ran a 1.5°C scenario” answers one item on the input list.
IFRS S2 names no scenario set: the NGFS scenarios and the IEA Net Zero Emissions by 2050 Scenario are reference sets a company may choose, and whichever it uses it names the vintage.
| ¶22(b)(i) — the inputs to disclose |
|---|
| Which scenarios were used, and their sources |
| Whether the analysis included a diverse range of scenarios |
| Whether the scenarios are associated with transition or physical risks |
| Whether one was aligned with the latest international agreement on climate change |
| Why the chosen scenarios are relevant to assessing resilience |
| The time horizons used |
| The scope of operations used, such as locations and business units |
Metrics · greenhouse gases
Paragraph 29(a) asks for absolute gross greenhouse gas emissions with measurement methods and relevant explanations.
Module 01 / 03
Report Scope 1, Scope 2 and Scope 3 as applicable.
Module 02 / 03
Use metric tonnes of CO2 equivalent.
Module 03 / 03
Explain the framework, inputs and assumptions.
Paragraph 29 opens the metrics with greenhouse gases, and ¶29(a)(i) asks for absolute gross emissions for the reporting period, in metric tonnes of CO2 equivalent.
Absolute and gross: not net of offsets, and not an intensity figure alone.
The measurement basis is the GHG Protocol Corporate Standard (2004), unless the entity is required, in whole or in part, by a jurisdictional authority or an exchange to use a different method.
Paragraph 29(a)(iv) is the disaggregation people miss: Scope 1 and 2 are split between the consolidated accounting group and other investees, such as associates and joint ventures.
A net emissions target needs its gross equivalent beside it, under paragraph 36(c).
| Sub-limb | Requirement |
|---|---|
| 29(a)(i) | Absolute gross emissions for the period in tCO2e, classified as Scope 1, Scope 2 and Scope 3 |
| 29(a)(ii) | Measure under the GHG Protocol Corporate Standard (2004) unless a jurisdictional authority or exchange requires another method |
| 29(a)(iii) | The measurement approach, inputs and assumptions, why they were chosen, and any changes |
| 29(a)(iv) | Split Scope 1 and 2 between the consolidated accounting group and other investees |
| 29(a)(v) | Location-based Scope 2, and information about contractual instruments |
| 29(a)(vi) | The Scope 3 categories included; financed emissions for asset management, commercial banking and insurance |
The three scopes
IFRS S2 asks for location-based Scope 2 and information about contractual instruments needed to understand it.
Use the required location-based figure.
Explain relevant contractual instruments.
Identify the included Scope 3 categories.
Scope 2 carries the extra limb: paragraph 29(a)(v) requires the location-based figure, with information about any contractual instruments needed to understand it, and the GHG Protocol Scope 2 Guidance is where the two methods are defined.
Scope 3 is not one number; it is also a statement of which categories were counted.
Paragraph B32 says the entity shall consider its entire value chain and all 15 categories of the GHG Protocol Scope 3 Standard (2011), and disclose which are included.
Consider all fifteen is not report all fifteen.
Paragraph B33 closes the obvious gap: whatever method is used, the categories included must be disclosed.
Financed emissions — the part of Category 15 attributed to loans and investments — are the subject of paragraphs B58 to B63A, and the attribution method many financial institutions use is set out on the PCAF standard for UK financial institutions and in the PCAF Global GHG Standard, which IFRS S2 does not name.
The UK side of Scope 3 is on Scope 3 under UK SRS, and measuring it at scale on carbon management software.
| Scope | What IFRS S2 adds |
|---|---|
| Scope 1 | Split between the consolidated group and other investees |
| Scope 2 | Location-based figure, plus contractual-instrument information |
| Scope 3 | Consider all 15 categories; disclose which are included |
| Category 15 | Financed emissions for asset management, banking and insurance |
Metrics · the seven categories
Internal carbon prices sit alongside other cross-industry metrics rather than standing in for an emissions inventory.
Module 01 / 03
Explain whether and how an internal price is used.
Module 02 / 03
Report material climate-related exposure metrics.
Module 03 / 03
Connect metrics to investment and remuneration where required.
Source line: IFRS S2 ¶¶28–31. ¶30 applies the reasonable-and-supportable test to (b) to (d) only; ¶31 sends (b) to (g) to ¶¶B64–B65.
Paragraph 29(f)(ii) asks for the price the entity actually uses: not a range and not a methodology.
Because (f)(i) says “whether and how”, an entity with no internal carbon price still has a disclosure to make.
Appendix A defines an internal carbon price as a price used to assess the financial implications of changes to investment, production and consumption patterns.
Paragraph 29(g) is the neighbour of ¶6(a)(v): the governance disclosure and the metric have to agree.
Paragraph 28 frames all of this: paragraph 29 is the first of three limbs, alongside industry-based metrics (¶32) and targets (¶¶33–37).
Worked example
Paragraph 29(f) asks whether and how a carbon price is used and for the price per tonne actually used; it does not require an entity to invent one.
| Case | Fictional inputs | Disclosure consequence |
|---|---|---|
| A shadow price is used | A fictional company applies £80 per tCO2e to compare investments with an assumed difference of 1,000 tCO2e. | The illustrative carbon-cost difference is £80,000, and the disclosure explains the £80 price and its role in the investment comparison. |
| No internal price is used | A different fictional company does not apply a carbon price in decision-making. | Explain that position under whether and how rather than importing a market price and presenting it as the company’s own. |
| The number changes | The company uses different prices for defined decisions. | Describe the prices actually used and their decision context instead of offering a policy slogan. |
The £80 price and 1,000-tonne difference are invented teaching inputs, not a benchmark, tax, forecast or required carbon price.
Metrics · targets
Paragraphs 33–36 ask for target characteristics, review and performance, with additional greenhouse-gas target disclosures.
Module 01 / 03
Metric, scope, base period and target period.
Module 02 / 03
Validation, review and planned milestones.
Module 03 / 03
Progress and explanations of revisions.
Paragraph 33 asks for each climate-related target the entity has set, and any it is required to meet by law or regulation, with the metric, objective, scope, period, base period, milestones and whether it is absolute or intensity-based.
It also asks how the latest international agreement on climate change has informed the target.
Paragraph 34 asks whether the target and its methodology were validated by a third party, and how the entity reviews and monitors it.
Paragraph 35 asks for performance against each target and an analysis of the trend.
Paragraph 36(e) is where carbon credits enter: the extent to which a net target relies on them, which third-party scheme will verify them, whether they are nature-based or technological removals, and anything else needed to judge their credibility.
This is one of the three things the IFRS Foundation says IFRS S2 adds to the TCFD (ISSB and TCFD).
IFRS S2 does not require any credit-quality framework, so a reader may meet the ICVCM Core Carbon Principles beside ¶36(e) as one way to describe credibility.
| ¶36 | For each greenhouse gas target |
|---|---|
| (a) | Which greenhouse gases are covered |
| (b) | Whether Scope 1, 2 or 3 is covered |
| (c) | Gross or net — and a net target needs its gross target disclosed separately |
| (d) | Whether a sectoral decarbonisation approach was used |
| (e) | Planned use of carbon credits: reliance, verifying scheme, type, and credibility factors |
The version
The December 2025 changes concern Category 15 and specific measurement and classification reliefs rather than removing Scope 3.
Module 01 / 03
Read the Category 15 limitations and disclosures.
Module 02 / 03
Check the conditions for alternative methods or GWP values.
Module 03 / 03
Use the amended text from its effective period or disclose early use.
The ISSB issued Amendments to Greenhouse Gas Emissions Disclosures in December 2025, and paragraph C1B applies them for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted and disclosed.
The ISSB’s own explanation is that they were “developed in response to implementation challenges identified as companies began applying the Standard”.
Paragraph 29A lets an entity limit Scope 3 Category 15 to its financed emissions and exclude emissions attributable to derivatives.
Paragraph 29B then requires it to explain what it treated as a derivative and describe the financial activities it excluded.
Paragraph 29C requires, where Category 15 is included, the total Category 15 figure and the subtotal of financed emissions within it.
Paragraphs B62A and B63A replace a fixed industry-classification system for financed emissions with the entity’s own choice, explained.
The amended ¶29(a)(ii) and ¶¶B21–B22 widen the jurisdictional reliefs for measurement method and global warming potential values to requirements that apply “in whole or in part”.
These are the ISSB’s changes; UK endorsement did not make them, and attributing them to the UK is a common and checkable error.
UK SRS S2 was issued after them and includes them as made, with ¶¶29A–29C in its own published text; the full project record holds the history.
| ¶C1A | Paragraphs |
|---|---|
| Amended | 29(a)(ii), 29(a)(vi)(2), B21–B22, B24, B28, B37, B59, B62(a), B63(a), C4(b) |
| Added | 29A–29C, B62A, B63A, C1B, C6 |
| Apply from | Annual periods beginning on or after 1 January 2027 (¶C1B) |
The ISSB published an exposure draft of amendments to the Industry-based Guidance on Implementing IFRS S2 in July 2025, and comments closed on 30 November 2025.
In March 2026 it proposed amendments to three more SASB Standards and the matching volumes of the guidance.
The companion project, Enhancing the SASB Standards, runs alongside, and the July 2026 taxonomy update proposal follows the December amendments.
None of these changes a paragraph of the Standard yet; they are proposals.
Financed emissions · which paragraphs bite
Summarises the paragraphs; read the standard before drafting.
Under the FCA’s rules a listed firm may disclose or explain.
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Source line: IFRS S2 ¶¶29(a)(vi), 29A–29C, B58–B63A; UK SRS S2 ¶B59A; FRC FAQs.
The layers
TCFD recommendations, IFRS S2, UK endorsement and FCA application rules each add different information.
TCFD supplied the architecture.
IFRS S2 supplies detailed requirements.
Endorsement and application rules determine the local basis.
Source line: TCFD; IFRS S2; ISSB amendments; DBT Annex A; FCA PS26/19.
Reading aid
A disclosure review should connect each requirement to evidence, an explanation or an applicable relief.
Identify relevant paragraphs and guidance.
Locate source records and judgements.
Record gaps, reliefs and review actions.
Check whether the report cites the June 2023 text or the December 2025 text, because Appendix C differs between them.
The test is the effect on cash flows, access to finance or cost of capital over the short, medium or long term.
Paragraph 6(a) asks for the body or individual, and 6(a)(v) must agree with the remuneration percentage in 29(g).
Look for the description, the physical or transition classification, the time horizons and the definition of the horizons.
Paragraph 22(b)(i) asks which scenarios, their sources, the horizons and why they are relevant, not only that one was run.
Paragraphs 24 to 26 ask how risks are identified, assessed, prioritised and monitored, and whether integrated into overall risk management.
Paragraph 29(a) to (g) each need an answer, including “whether and how” for the internal carbon price in 29(f).
Paragraph 36(c) asks for the associated gross target, and 36(e) for the planned use of carbon credits.
Source line: IFRS S2, December 2025 text.
The route
A company's reporting route depends on local adoption and application rather than the ISSB's publication alone.
Issues and amends the international standard.
Adopts or endorses a reporting basis.
Applies the relevant reporting instrument.
Sources: DBT publication; Annex A; FCA PS26/19.
Endorsement
UK SRS S2 follows IFRS S2 with endorsed differences that must be read from Annex A and the UK text.
Module 01 / 03
Check industry-guidance wording.
Module 02 / 03
Check the UK's additional period-alignment explanation.
Module 03 / 03
Read the UK appendix and application rule.
| IFRS S2 | UK SRS S2 | The difference |
|---|---|---|
| ¶¶12, 23, 32 | ¶¶12, 23, 32 | “Shall refer to and consider” the Industry-based Guidance becomes “may”. ¶37 and ¶B65(d) keep “shall”. |
| — | ¶B59A | Added: explain why financed emissions could not be disclosed for the same period, where that is impracticable. The one place UK SRS is stricter. |
| ¶¶C1, C2 | ¶C2 | Effective date removed. |
| ¶C3 | ¶C1 | No comparatives in year one — renumbered. |
| ¶C4(a) | ¶C3 | GHG Protocol method relief — kept, limited to the first annual reporting period. |
| ¶C4(b) | ¶C4 | Scope 3 relief — the first-period limit removed; availability left to legislation or regulation. |
| — | ¶C6 | Added: the reliefs are subject to UK law and regulation. |
Annex A, row by row · UK SRS against IFRS
14 of 14 rows shown
From Annex A of the government response to the UK SRS consultation (25 February 2026).
Annex A: “Where requirements in the standards are not included in the table, there are no differences between the two.” It gives no count.
Nothing is stored.
Body paragraphs keep their numbers; the transition appendix does not, which is why “the ¶C4 relief expires after year one” is true of IFRS S2 and false of UK SRS S2.
Every other UK change is permissive; UK SRS S2 ¶B59A runs the other way, as the FRC’s FAQs also record.
The two standards side by side are on UK SRS against IFRS S1 and S2, and the sister site keeps its own UK SRS S2 record, as does the UK SRS reference as a whole.
Scope 3 relief
IFRS S2's first-year relief, the UK-endorsed text and FCA time limits must not be treated as the same clock.
Read the standard's first-year transition provisions.
Read Appendix C without importing the IFRS expiry.
Apply the listed route's one-year Scope 3 limit.
Simplified, from IFRS S2 ¶C4(b), UK SRS S2 ¶¶C4, C6, DBT Annex A and FCA PS26/19.
The DBT Annex A row for the relief says the first-period limit was removed and availability left to legislation or regulation.
The FCA then sets one year of non-disclosure of Scope 3 under UK SRS S2 for a listed company, and a company using it states that it is doing so.
A reader quoting “the Scope 3 relief” has to say which of the three instruments is meant.
Status
The UK published its endorsed standards for voluntary use before the FCA made the listed comply-or-explain route.
IFRS S2 has an effective date of its own; UK SRS S2 has none, because the government removed it.
UK SRS S2 was published by the Department for Business and Trade on 25 February 2026 and is available for voluntary use by any entity (see also the government’s framework page and section 414CB of the Companies Act 2006).
The FCA’s final rules of 30 September 2026 require listed companies in UKLR 6, 14, 15, 16 and 22 to report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027, with first reporting in 2028.
That is comply or explain across UK SRS S2 as well: the CP26/5 consultation had proposed making UK SRS S2 mandatory, and the final rules do not.
A listed company may use one year’s relief from disclosing Scope 3 under UK SRS S2, and states that it is doing so.
An EU route into a UK group is separate again, and is covered on CSRD for UK companies.
Your period
A reporting decision needs the standard, amendment status and applicable jurisdictional instrument.
IFRS S2 or UK SRS S2?
Which amendments apply to the period?
What local requirement or relief controls reporting?
Which text applies to a period
Indicative, not advice.
Group, jurisdiction and listing-category questions sit on the pages for each regime.
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Source line: IFRS S2 ¶¶C1, C1B, C4; UK SRS S2 ¶¶C2–C6; FCA PS26/19 ¶¶3.12, 3.14, 3.19.
Against IFRS S1
IFRS S1 governs general sustainability-related financial disclosure while IFRS S2 supplies climate-specific content.
Materiality, connected information and presentation.
Climate exposures, resilience, emissions and targets.
Apply shared rules without duplicating disclosures.
IFRS S1 sets the general requirements for sustainability-related financial disclosures, and it applies to every sustainability topic, not only climate.
Its paragraphs 54 to 58 say what an entity does when no IFRS Sustainability Disclosure Standard covers a topic.
The IFRS S1 navigator page and our IFRS S1 guide read it in full.
IFRS S2 is the climate standard: it asks for physical risks, transition risks and climate-related opportunities in the four areas.
It cannot be applied on its own, because it relies on IFRS S1 for the general requirements.
Earlier application of IFRS S2 needs IFRS S1 applied as well, as the Foundation’s navigator page for IFRS S1 records.
Paragraph 7 of IFRS S2 points to IFRS S1 ¶B42(b): where oversight is integrated, the entity gives integrated governance disclosures.
In the UK the pair became UK SRS S1 and UK SRS S2, and PS26/19 allows two years’ relief from S1 non-climate matters.
The pair is read together on IFRS S1 and S2.
Against TCFD
IFRS S2 incorporates TCFD's recommendations while adding detailed requirements, including industry-based metrics.
Four recommendations and eleven disclosures.
Requirements and application guidance.
A TCFD consistency claim alone does not establish S2 compliance.
| Pillars | Four recommendations: governance, strategy, risk management, metrics and targets | The same four areas, set out in paragraphs 5 to 37 |
| Disclosures | Eleven recommended disclosures | Described by the IFRS Foundation as consistent with the four recommendations and eleven disclosures |
| Who owns it now | The Task Force disbanded on 12 October 2023; the FSB asked the IFRS Foundation to take over monitoring | The ISSB, which issued it in June 2023 and amended it in December 2025 |
| Scenario analysis | A recommendation | Required (¶22), with depth scaled to circumstances (¶B8) |
| Emissions basis | Scope 1 and 2, and Scope 3 if appropriate | Absolute gross Scope 1, 2 and 3 under the GHG Protocol Corporate Standard (¶29(a)) |
| Industry metrics | Industry guidance in the 2017 Annex | Industry-based metrics from the SASB Standards (¶32) |
| Carbon credits and financed emissions | Not a separate disclosure | Planned use of carbon credits (¶36(e)); financed emissions for asset management, banking and insurance (¶29(a)(vi)) |
7 of 7 rows
Sources: TCFD Final Report; IFRS Foundation, ISSB and TCFD; IFRS S2 comparison with the TCFD; IFRS S2 ¶¶22, 29(a), 32, 36(e).
The IFRS Foundation says the requirements in IFRS S2 are “consistent with” the TCFD’s four core recommendations and eleven recommended disclosures, published in its June 2017 Final Report.
“Fully incorporates” is the wrong phrase if it is read as “and asks nothing more”.
The Task Force’s own site records that the FSB asked the IFRS Foundation to take over monitoring companies’ climate-related disclosures.
The comparison from the UK end is on UK SRS against TCFD, and the framework itself on what the TCFD is.
Against the ESRS
ISSB and ESRS reporting can share records while using different materiality tests and legal routes.
Financial materiality for primary users.
Impact and financial materiality.
Identify shared and additional disclosures.
IFRS S2 applies a single, financial test: effects on cash flows, access to finance or cost of capital (¶2).
The European standards add an impact limb on top of a financial limb whose definition, the interoperability guidance says, is aligned with IFRS S1.
The definition is aligned; the regimes are not, because the ESRS keep the impact lens.
Neither test is “enterprise value”, a phrase that appears in neither standard.
The Commission adopted the revised ESRS on 3 July 2026, and Delegated Regulation (EU) 2026/1563 applies them to financial years beginning on or after 1 January 2027, so a comparison should say which ESRS version it used.
The EU’s technical adviser is EFRAG, and the standards themselves are read on the European Sustainability Reporting Standards.
The neighbours
IFRS S2 draws on established climate disclosure and measurement frameworks without making every external document a separate obligation.
Module 01 / 03
Disclosure architecture.
Module 02 / 03
Referenced emissions measurement framework.
Module 03 / 03
Relevant industry-based metrics and guidance.
Elsewhere
A jurisdiction considering adoption is different from a rule requiring companies to report.
Module 01 / 03
Consultation or policy intention.
Module 02 / 03
Published local standards or rules.
Module 03 / 03
Defined entities, periods and transition arrangements.
IFRS S2 is a global baseline that each jurisdiction adopts, endorses or adapts; it is not law anywhere by itself.
The UK route was endorsement into UK SRS S2, with the differences mapped in Annex A.
The IFRS Foundation keeps its own register of use by jurisdiction, split into profiles, for approaches that are final, and snapshots, for those still in progress.
The United Kingdom appears as a snapshot, not a profile.
The adoption count and what it does and does not mean are on the ISSB guide; for financial institutions, the sister site covers IFRS sustainability reporting in finance.
Guidance
Implementation materials help explain the requirements but do not replace the operative standard.
Read the requirement first.
Use examples and implementation support.
Record how the company's facts meet the requirement.
Appendix B, the application guidance, is part of IFRS S2, and its paragraphs are requirements.
Paragraph 31 sends metric categories (b) to (g) to ¶¶B64–B65.
The Industry-based Guidance derives from the SASB Standards; ¶12, ¶23 and ¶32 point at it.
In UK SRS S2 those three paragraphs say “may”, not “shall”.
The Foundation’s introduction, its TCFD comparison and the knowledge hub aid understanding and add no requirement.
The comparison document says so on its first page.
Source line: IFRS S2 ¶¶12, 31, B64–B65; Industry-based Guidance project; DBT Annex A. For the IFRS S1 side, see the IFRS S1 navigator page and our IFRS S1 guide.
Frequently asked
IFRS S2 Climate-related Disclosures is the ISSB's climate standard, issued in June 2023 and effective for annual reporting periods beginning on or after 1 January 2024 under its paragraph C1.
It requires an entity to disclose information about the climate-related risks and opportunities that could reasonably be expected to affect its cash flows, its access to finance or cost of capital over the short, medium or long term, organised in four areas: governance, strategy, risk management, and metrics and targets. It is applied together with IFRS S1.
Paragraph 6 is the governance requirement.
Paragraph 6(a) requires the entity to identify the governance body or individual responsible for oversight of climate-related risks and opportunities and to disclose how that responsibility is reflected in terms of reference and mandates, how the body determines whether the right skills are available or will be developed, how and how often it is informed, how it takes climate into account when overseeing strategy, major transactions and risk management (including trade-offs), and how it oversees target-setting — including whether and how performance metrics are included in remuneration policies, a cross-reference to paragraph 29(g).
Paragraph 6(b) covers management's role: whether it is delegated to a specific position or committee, and whether management uses controls and procedures to support oversight.
Four things.
Paragraph 10(a) is to describe the climate-related risks and opportunities that could reasonably be expected to affect the entity's prospects.
Paragraph 10(b) is to explain, for each climate-related risk, whether the entity considers it a physical risk or a transition risk.
Paragraph 10(c) is to specify, for each risk and opportunity, over which time horizons — short, medium or long term — the effects could reasonably be expected to occur.
Paragraph 10(d) is to explain how the entity defines short, medium and long term and how those definitions link to the planning horizons it uses for strategic decision-making.
Summaries that carry only (a) and (c) leave out the two limbs that are hardest to meet.
Paragraph 29(f), in the metrics and targets pillar.
It has two limbs: 29(f)(i), an explanation of whether and how the entity is applying a carbon price in decision-making (the Standard's examples are investment decisions, transfer pricing and scenario analysis); and 29(f)(ii), the price for each metric tonne of greenhouse gas emissions the entity uses to assess the costs of its emissions.
Because the first limb says 'whether and how', an entity that uses no internal carbon price still has something to disclose.
Paragraph 31 then points to paragraphs B64 to B65 for the application guidance.
Yes.
Paragraph 22 says the entity shall use climate-related scenario analysis to assess its climate resilience, using an approach commensurate with its circumstances.
What scales with the entity is the depth of the analysis, not the obligation: paragraph B8 asks for an approach that considers all reasonable and supportable information available at the reporting date without undue cost or effort.
Paragraph 22(b) then asks how and when the analysis was carried out, including the reporting period in which it was done.
Paragraph 29(a) requires absolute gross Scope 1, Scope 2 and Scope 3 emissions for the reporting period in metric tonnes of CO2 equivalent, measured under the GHG Protocol Corporate Standard (2004) unless a jurisdictional authority or an exchange requires a different method.
Scope 1 and 2 are split between the consolidated accounting group and other investees; Scope 2 is disclosed location-based, with information about contractual instruments; and for Scope 3 the entity considers all 15 categories and discloses which it includes, with additional financed-emissions information for asset management, commercial banking and insurance.
The ISSB's Amendments to Greenhouse Gas Emissions Disclosures, issued in December 2025, apply for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted.
They added paragraphs 29A to 29C, which let an entity limit Scope 3 Category 15 to its financed emissions and require it to disclose total Category 15 emissions and the financed subtotal; amended the jurisdictional reliefs on measurement method and global warming potential values; and replaced the fixed industry-classification requirement for financed emissions with the entity's own choice of system, explained.
They are the ISSB's changes, not the UK's.
IFRS S2 keeps the TCFD's four pillars — governance, strategy, risk management, and metrics and targets — and the IFRS Foundation describes it as consistent with the four recommendations and eleven recommended disclosures.
It then asks for more: industry-based metrics, the planned use of carbon credits, and financed emissions.
Scenario analysis is required rather than recommended.
The TCFD disbanded on 12 October 2023 and the FSB asked the IFRS Foundation to take over monitoring companies' climate-related disclosures.
Not as IFRS S2.
The UK version is UK SRS S2, published by the Department for Business and Trade on 25 February 2026 and voluntary for any entity.
Under the FCA's final rules (PS26/19, 30 September 2026), listed companies in UKLR 6, 14, 15, 16 and 22 must report against UK SRS on a comply-or-explain basis for accounting periods beginning on or after 1 January 2027 — comply or explain across UK SRS S2 as well as S1.
The consultation, CP26/5, had proposed making UK SRS S2 mandatory; the final rules do not.
No, and the change is one word.
IFRS S2 paragraph 12 says an entity shall refer to and consider the applicability of the industry-based disclosure topics in the Industry-based Guidance on Implementing IFRS S2.
Annex A of the UK government's response records that UK SRS S2 changed 'shall' to 'may' at paragraphs 12, 23 and 32.
Paragraph 37 and paragraph B65(d) keep 'shall'.
IFRS S1 sets the general requirements for sustainability-related financial disclosures; IFRS S2 applies them to climate.
IFRS S2 is applied together with IFRS S1, and the IFRS Foundation's navigator page says earlier application of IFRS S2 is permitted only as long as IFRS S1 is also applied.
Paragraph 7 of IFRS S2 points back to IFRS S1 so that governance information is not duplicated.
The paragraph-numbered text of IFRS S2, as amended in December 2025, is published free as HTML on the IFRS Foundation's website without a sign-in.
The Foundation's navigator invites registration for PDF and HTML copies of the issued standards and warns that some content may later need premium access.
Whichever copy you use, name the version: the June 2023 and December 2025 texts share body numbering and differ in Appendix C.
It requires disclosure about one, not the existence of one.
Paragraph 14(a)(iv) asks for information about any climate-related transition plan the entity has, including the key assumptions used in developing it and the dependencies on which it relies.
An entity with no plan has no plan to describe, and the FCA's final rules for listed companies separately ask a company without a published plan to say why not.
Paragraph 36(e) asks, for each greenhouse gas emissions target, about the planned use of carbon credits: the extent to which the target relies on them, which third-party scheme will verify or certify them, whether they are nature-based or technological removals, and any other factor needed to understand their credibility.
A net target also needs its associated gross target disclosed separately under paragraph 36(c).
The IFRS Foundation names the planned use of carbon credits as one of the additions IFRS S2 makes to the TCFD recommendations.
Paragraph C1 makes IFRS S2 effective for annual reporting periods beginning on or after 1 January 2024.
The December 2025 amendments apply from annual periods beginning on or after 1 January 2027 under paragraph C1B, and earlier application is permitted if it is disclosed.
UK SRS S2 has no effective date of its own: the government removed it.
For listed companies in UKLR 6, 14, 15, 16 and 22 the date that matters is the FCA's, 1 January 2027, under final rules that are comply or explain.
UK SRS S2 was published on 25 February 2026, after the amendments, and its text carries paragraphs 29A to 29C.
The Department for Business and Trade's Annex A treats paragraphs C1A and C1B as not applicable in the UK because the amendments were already included.
The amendments themselves are the ISSB's, issued in December 2025, and the UK did not make them.
Paragraph B59A, which is UK-only, sits beside them and runs the other way, asking for more.
Paragraph 29A, added in December 2025, lets an entity limit its Scope 3 Category 15 disclosure to financed emissions and exclude emissions attributable to derivatives.
Paragraph 29B then requires it to explain what it treated as a derivative and to describe the financial activities it excluded.
Paragraph 29C requires, where Category 15 is included, the total Category 15 figure and the subtotal of financed emissions within it.
All three apply from annual periods beginning on or after 1 January 2027.
Paragraph 29(a) requires absolute gross Scope 3 emissions, and paragraph B32 asks the entity to consider all 15 categories of the GHG Protocol Scope 3 Standard and disclose which it includes.
Considering all fifteen is not the same as reporting all fifteen.
A relief in paragraph C4(b) lets an entity leave Scope 3 out in its first annual reporting period; UK SRS S2 removed that time limit, and the FCA's final rules allow a listed company one year's non-disclosure of Scope 3, which it states it is using.
IFRS S2 applies one test, the effect on cash flows, access to finance or cost of capital.
The European standards add an impact lens to a financial-materiality limb whose definition the interoperability guidance says is aligned with IFRS S1, so the definitions line up and the regimes do not.
The ESRS were revised by Commission Delegated Regulation (EU) 2026/1563, which applies to financial years beginning on or after 1 January 2027, so any comparison should say which ESRS version it uses.
Paragraphs 33 to 37 cover targets.
Paragraph 33 asks for each climate-related target, its metric, objective, scope, period, base period and milestones, and whether it is absolute or intensity-based.
Paragraph 34 asks about third-party validation and how the entity reviews the target, paragraph 35 asks for performance and the trend, and paragraph 36 adds the greenhouse gas target detail, including carbon credits under 36(e).
A net target needs its associated gross target disclosed separately under paragraph 36(c).
It is a UK-only paragraph with no IFRS S2 equivalent.
Where an entity determines it is impracticable to reliably estimate its financed emissions for the same reporting period as the related financial statements, it discloses why, the measurement approach, inputs and assumptions used, and its plan, including the timeline, to be able to report for the same period.
It is the one place the UK standard asks for more than IFRS S2.
Two things go by that name.
The application guidance in Appendix B is part of the Standard, and paragraph 31 sends the entity to paragraphs B64 to B65 for several metric categories.
The Industry-based Guidance on Implementing IFRS S2, which derives from the SASB Standards, is separate: IFRS S2 paragraphs 12, 23 and 32 refer to it, and UK SRS S2 changed 'shall' to 'may' at those three paragraphs.
The ISSB has proposed amendments to that guidance, with a first exposure draft published in July 2025.
Further reading
Keep the standard, amendments and local application documents together when checking a climate report.
Module 01 / 03
IFRS S2 and its issued amendments.
Module 02 / 03
UK SRS S2 and Annex A.
Module 03 / 03
FCA final rules and relevant guidance.
Fictional example
A fictional property business links an exposed asset to governance, resilience analysis and an appropriate metric.
Module 01 / 03
Identify the asset and flood risk.
Module 02 / 03
Explain adaptation choices and scenario assumptions.
Module 03 / 03
Show the relevant asset exposure and target progress.
A fictional property business links an exposed asset to governance, resilience analysis and an appropriate metric.
Editorial preparation
An editorial review links a climate statement to its requirement, source records and approval.
Identify the exact paragraph.
Retain data, assumptions and calculation versions.
Record judgement, challenge and approval.
An editorial review links a climate statement to its requirement, source records and approval.
Prepare the evidence
Use this preparation sequence alongside the detailed requirements on this page.
An editorial workflow, not a statutory schedule.
Identify the standards and edition the organisation is using.
Align the reporting entity, period and connected financial information.
Document which sustainability risks and opportunities affect the disclosure.
Build the governance, strategy, risk management and metrics evidence.
Explain the assumptions, estimates, uncertainty and comparative treatment.
Check what the final report can accurately say about its compliance.
Read the applicable instrument: IFRS S2 Climate-related Disclosures — December 2025 text (free HTML), ¶¶1–37, 29A–29C, Appendices A–C
A practical brief
Ask for a pack that lets the next reviewer retrace the scope decision, follow the evidence and understand the limitations.
This describes a useful handover; it does not certify compliance or establish that a vendor or adviser delivers it.
Module 01 / 04
Write down the entity, reporting route and relevant period, including why the route applies.
Module 02 / 04
Attach each reported figure or statement to its source, method, version and limitations.
Module 03 / 04
Name the preparer, reviewer, open questions and decisions taken before publication.
Module 04 / 04
Retain the working files and unresolved actions so the next reporting cycle can reuse the evidence.
Keep the input records, calculation files and narrative together.
Record the assumptions challenged and any limitations still unresolved.
Keep the approved version and the actions carried forward.
Continue your research
Sources
Every paragraph on this page is quoted from or cited to IFRS S2 as amended in December 2025, which the IFRS Foundation publishes free and without a sign-in.
Where a requirement belongs to the UK standard, the entry says so.
Every paragraph quoted on this page. The version UK SRS S2 is based on.
Same body numbers; different transition appendix. Kept because older tools cite it.
IFRS S2 ¶7 defers to it on avoiding duplication; S2 cannot be applied on its own.
Issued June 2023; ¶C1 effective date; the TCFD and SASB lineage; the December 2025 amendments.
The amendments are the ISSB’s, not the UK’s.
The press release for the issuance. Not the Standard’s text.
Why the December 2025 amendments were made: “implementation challenges identified as companies began applying the Standard”.
Profiles and snapshots; the UK is a snapshot.
The industry-based topics ¶12 and ¶32 refer to.
“Consistent with” the four recommendations and eleven disclosures; the three additions.
Disbanded 12 October 2023; the site is no longer updated.
The measurement basis fixed by IFRS S2 ¶29(a)(ii).
The 15 categories ¶29(a)(vi)(1) and ¶B32 point at.
“Where requirements in the standards are not included in the table, there are no differences between the two.”
No effective date; ¶C4 Scope 3 relief without a time limit.
Published 30 September 2026. Comply or explain across UK SRS for UKLR 6, 14, 15, 16 and 22 from accounting periods beginning on or after 1 January 2027.
Proposed mandatory UK SRS S2; the final rules did not adopt it.
In force 10 November 2026; applies to financial years beginning on or after 1 January 2027.
The adoption date. Cite the delegated act for when the rules apply.
The financial-materiality definition is aligned; the regimes are not.
The Foundation’s own mapping; it states that it is not part of the Standards and adds no requirement.
The Foundation’s orientation for readers new to S1 and S2.
IFRS S2 is applied with IFRS S1; earlier application of S2 needs S1 as well.
Exposure draft July 2025, comments closed 30 November 2025; a March 2026 draft covers three more SASB Standards.
The companion project to the industry-based guidance amendments.
The government’s framework for assessing and endorsing the IFRS baseline.
Where the UK requires reliefs to be disclosed alongside the statement of compliance.
The FRC’s account of UK SRS, including financed emissions and reliefs without time limits.
The non-financial and sustainability information statement; UK SRS S2 as a national framework under s.414CB(6).
The strategic-report duty that sits beside s.414CB.
The Policy Statement text: scope, commencement, reliefs.
Consultation draft; closed 20 March 2026.
The location-based and market-based methods behind IFRS S2 ¶29(a)(v).
A method many financial institutions use for financed emissions; IFRS S2 does not name it.
A credibility framework a reader may meet beside ¶36(e); IFRS S2 does not require it.
A reference scenario set; IFRS S2 ¶22 names no scenario set. Name the vintage used.
A second reference set; WEO-2025 is no longer a limited-overshoot pathway.
The EU climate standard set beside IFRS S2 in the ESRS section.
Continue reading
The standard S2 sits under: materiality, the four areas, and what paragraphs 54 to 58 say when no standard covers a topic.
Annex A row by row, and five “differences” that are not in it.
The UK version of the climate standard, with no effective date and an untimed Scope 3 relief.