IFRS S2 (Climate-related Disclosures)
IFRS S2 is the ISSB's climate disclosure standard, issued in June 2023 alongside IFRS S1. It fully incorporates the TCFD recommendations and adds what TCFD left optional: scope 1, 2 and 3 emissions measured under the GHG Protocol, quantified financial effects of climate risks, climate resilience assessment, and industry-based metrics derived from the SASB Standards.
IFRS S2 is what most companies mean when they say they report under the ISSB. It takes the four TCFD pillars (governance, strategy, risk management, and metrics and targets) and turns each recommendation into a requirement. A company applying IFRS S2 meets the TCFD recommendations. The reverse is not true.
The emissions requirements are the biggest change from TCFD. Scope 1 and 2 are required for every reporter, measured under the GHG Protocol Corporate Standard unless a jurisdiction mandates another method. Scope 3 is required too. The company must consider all 15 GHG Protocol categories and disclose the measurement approach, inputs, and assumptions behind the figure it reports. Asset managers, commercial banks, and insurers must also disclose financed emissions.
IFRS S2 asks for numbers where TCFD asked for narrative. Companies must disclose the current and anticipated financial effects of climate risks and opportunities on financial position, performance, and cash flows, unless they can show a quantitative estimate is not available. They must also disclose the amount and percentage of assets or business activities vulnerable to transition and physical risks, any internal carbon price and how it is applied, planned use of carbon credits to meet net emissions targets, and whether climate performance is linked to executive pay.
Industry-based metrics come from the Industry-based Guidance that accompanies IFRS S2, which derives from the SASB Standards. Reporters must refer to and consider the applicability of the topics and metrics for their industry.
The ISSB amended IFRS S2 in December 2025 to give companies relief on some scope 3 category 15 (financed emissions) disclosures, on the use of the Global Industry Classification Standard, and on jurisdictional GHG measurement methods. IFRS S2 is effective for annual reporting periods beginning on or after January 1, 2024, and binds companies only where a jurisdiction has adopted it. Requirements were in effect in 19 jurisdictions as of September 2026, including Australia, Japan, Hong Kong, Singapore, and China.
Frequently asked questions
What is IFRS S2? +
Does IFRS S2 require scope 3 emissions? +
Yes. IFRS S2 requires a company to consider all 15 GHG Protocol scope 3 categories and disclose the measurement approach, inputs, and assumptions behind the reported figure. Most adopting jurisdictions grant a one- to three-year deferral before scope 3 is due.
How is IFRS S2 different from TCFD? +
TCFD was a set of voluntary recommendations. IFRS S2 is an enforceable standard that requires what TCFD encouraged: scope 3 emissions, quantified financial effects, industry-based metrics, and disclosure of carbon credits, internal carbon pricing, and climate-linked pay.
Related terms
IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information)
IFRS S1 is the ISSB's general sustainability disclosure standard, issued in June 2023. It sets the rules that apply to every sustainability topic a company reports on: which risks and opportunities to cover, how to organize the disclosure around governance, strategy, risk management, and metrics and targets, and how the disclosure must connect to financial statements.
ISSB (International Sustainability Standards Board)
The ISSB is a body under the IFRS Foundation that issues global sustainability disclosure standards. IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) set the baseline for sustainability reporting worldwide, designed for investor-focused, financially material disclosures.
TCFD (Task Force on Climate-related Financial Disclosures)
TCFD is a framework developed by the Financial Stability Board for disclosing climate-related financial risks and opportunities. It organizes recommendations around four pillars: governance, strategy, risk management, and metrics and targets. Though the TCFD disbanded in 2023, its framework lives on through ISSB S2 and CSRD/ESRS.
SASB Standards (Sustainability Accounting Standards Board)
The SASB Standards identify the sustainability topics most likely to affect financial performance in 77 industries, and pair each topic with disclosure metrics. Originally published by the Sustainability Accounting Standards Board, they have been owned and maintained by the ISSB since 2022, and IFRS S1 and IFRS S2 require companies to refer to and consider them.
Scope 3 Emissions
Scope 3 emissions are all indirect greenhouse gas emissions that occur in an organization's value chain — both upstream (suppliers, purchased goods, business travel, employee commuting) and downstream (product use, end-of-life treatment, investments). Scope 3 typically represents 70–90% of a company's total carbon footprint.
Financed Emissions
Financed emissions are the greenhouse gas emissions attributable to a financial institution's lending and investment portfolios — Scope 3 Category 15 under the GHG Protocol. They represent the real-economy emissions that banks, asset managers, and insurers fund through their capital allocation decisions.
GHG Protocol
The GHG Protocol is the world's most widely used greenhouse gas accounting standard. Developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), it provides frameworks for organizations, cities, and countries to measure and manage their emissions across three scopes.