🌟 What's New

The IFRS Foundation has just dropped a new guidance document aimed at helping entities disclose information about their climate-related transition plans in line with IFRS S2. This move is part of a broader commitment to implement IFRS Sustainability Disclosure Standards (ISSB Standards). The guidance builds on material developed by the Transition Plan Taskforce (TPT) and is designed to help companies provide high-quality information about their climate-related transitions.

🔍 Key Details

This guidance supports entities applying IFRS S2 Climate-related Disclosures. It's crafted to enable companies to share comprehensive information about their climate-related transition plans, including both mitigation and adaptation efforts. Sue Lloyd, ISSB Vice-Chair, noted that this move addresses the costly fragmentation of disclosures and offers inspiration for entities making these disclosures.

"This guidance document addresses the fragmentation of disclosures about transition plans—which is costly for both preparers of information and investors—and provides inspiration for entities who are applying IFRS S2 when making disclosures about their climate-related transition plans," Lloyd said.

📋 What's Required

While IFRS S2 doesn't mandate a transition plan, it requires entities to disclose material information about sustainability-related risks and opportunities that could affect their prospects. This includes details on climate-related transitions, how entities mitigate and adapt to climate risks, and the necessary steps for a lower-carbon or climate-resilient economy.

🌐 Global Implications

Jurisdictions adopting ISSB Standards can use this guidance to enhance their disclosures. They can also add requirements to address local needs, such as explaining how GHG targets align with international climate agreements. This promotes high-quality, comparable information about entities' climate-related transitions.