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IFRS S2 climate disclosure, explained

IFRS S2 is the ISSB's global standard for climate-related disclosures — the baseline a growing number of countries are building their climate-reporting regimes on. Here is what it covers, how it is structured, and how an SME produces IFRS S2-aligned climate data.

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Summary for orientation only. IFRS S2 is a standard, not a law; its force depends on the jurisdiction adopting it. Not legal or accounting advice.

The short version
  • IFRS S2 is the ISSB's global standard for climate-related disclosures.
  • It is structured on the four TCFD pillars: governance, strategy, risk management, and metrics & targets.
  • Metrics & targets include Scope 1, 2, and 3 greenhouse-gas emissions.
  • It is a standard, not a law — it binds where a jurisdiction adopts it, which many are doing.
  • For SMEs, the practical need is climate data buyers and investors can rely on — which an ESG Passport provides.

What is IFRS S2?

IFRS S2 — Climate-related Disclosures is a standard issued by the International Sustainability Standards Board (ISSB), part of the IFRS Foundation. Alongside IFRS S1 (which covers general sustainability-related financial information), it gives capital markets a single, comparable language for how climate affects a business. It is designed to be a global baseline that national regulators can adopt or build on.

The four pillars of IFRS S2

IFRS S2 organises its disclosures around the same four areas the TCFD popularised:

  • Governance — the board and management oversight of climate-related risks and opportunities.
  • Strategy — the climate-related risks and opportunities the business faces and their effects on its business model, strategy, and financial position.
  • Risk management — how climate-related risks are identified, assessed, and managed, and how that integrates with overall risk processes.
  • Metrics & targets — the measurements used to manage climate, including Scope 1, Scope 2, and Scope 3 greenhouse-gas emissions (see our Scope 3 guide if that term is new), and any targets set.

Who adopts IFRS S2

Because IFRS S2 is a standard rather than a statute, it takes legal force through adoption. A growing number of jurisdictions are using IFRS S1 and S2 as the foundation of their own climate-disclosure regimes — for example Japan (SSBJ), Australia (ASRS), and others. That is what makes IFRS S2 the practical global reference point for climate disclosure, even where the local rules carry a different name.

IFRS S2 vs VSME vs the California laws

A quick orientation, since these are easy to mix up:

  • IFRS S2 / ISSB — a global, climate-specific disclosure baseline across the four pillars above.
  • VSME — a voluntary EU standard for SMEs spanning environment, social, and governance, broader than climate alone.
  • California SB 253 / SB 261 — US state laws that mandate emissions and climate-risk disclosure for large companies doing business in California.

They overlap heavily on emissions. EcoDiligence lets you enter that data once and map it to whichever framework a stakeholder recognises. For a full data-point-by-data-point comparison against California's law specifically, see SB 253 vs. IFRS S2.

How to produce IFRS S2 climate inputs with EcoDiligence

With a complete Passport: IFRS S2 — Scope 1–2 emissions, GHG targets and climate-readiness inputs. Structural estimate for a complete Passport, not a compliance or audit score. How we map frameworks

Scope 1 & Scope 2 emissions

The metrics core of IFRS S2 starts with your own emissions — EcoDiligence calculates them from your energy data with country-correct grid factors.

ISSB Transition Readiness (Pro)

An optional layer covering IFRS S2 transition-plan topics: GHG-reduction targets, timeframes, strategy, materiality, and financial-impact assessment.

Transparent and sourced

Every emission factor names its source and vintage. See the Methodology page for how the figures are derived.

Shareable Passport, PDF & exports

A public URL, a branded PDF, and the VSME Digital Template in Excel (for EFRAG's official XBRL converter) from one set of answers.

Create your free Passport to build the emissions core, then explore the ISSB Transition Readiness layer on the Pro plan. Weighing this against hiring a consultant? See what an ESG report typically costs.

Frequently asked questions

IFRS S2 is a standard issued by the ISSB, not a law in itself. It becomes mandatory where a jurisdiction chooses to adopt or build on it — and a growing number are doing exactly that, using IFRS S1 and S2 as the backbone of their national climate-disclosure regimes. Whether it applies to a specific company therefore depends on where that company reports.

IFRS S2 asks a company to disclose how climate affects it across four areas: governance (who oversees climate matters), strategy (climate-related risks and opportunities and their financial effects), risk management (how those risks are identified and managed), and metrics & targets — including greenhouse-gas emissions across Scope 1, Scope 2, and Scope 3.

IFRS S2 is built on the structure of the Task Force on Climate-related Financial Disclosures (TCFD) — the same four pillars — and the ISSB has taken over responsibility for monitoring climate-disclosure progress from the TCFD. In practice, an organisation already familiar with TCFD will recognise the shape of IFRS S2.

IFRS S2 is a climate-specific global baseline; the EU's VSME is a broader SME sustainability standard covering environment, social, and governance topics. They overlap on emissions and climate. An SME does not usually pick one — it maps the same underlying data to whichever framework a given stakeholder recognises. See our VSME guide for the EU side.

As investors, lenders, and large customers adopt IFRS S2, they need climate data from the companies they finance and buy from. That demand flows down the value chain as requests for your emissions and climate information. A climate-ready ESG Passport answers most of what they need.

EcoDiligence calculates your Scope 1 and Scope 2 emissions with country-correct grid factors, and Pro adds an optional ISSB Transition Readiness layer covering IFRS S2 transition-plan topics — GHG-reduction targets, timeframes, strategy, and financial-impact assessment. Everything is self-reported and clearly marked as not independently assured.

This page summarises IFRS S2 for orientation only and is not legal or accounting advice. IFRS S2 is a standard of the ISSB; its application to any specific company depends on the jurisdiction and adoption timeline. Always check the official texts at ifrs.org. EcoDiligence ESG Passports are self-reported summaries structured for ESG disclosure workflows, built on the EFRAG VSME Basic Module with optional IFRS S2 climate inputs. Content is not independently assured and does not constitute compliance, certification or an audit.

Build the climate data your stakeholders ask for

Start with Scope 1 and Scope 2 in a free ESG Passport; add IFRS S2 transition topics when you need them.

Create free PassportCalifornia SB 253 guide