Physical climate risk data,
ready for IFRS S2.
Most of IFRS S2 reads like TCFD. Industry metrics don't. IFRS S2 is the ISSB's global climate disclosure baseline, adopted in 28 jurisdictions by April 2026 with around a dozen more planning. Most of it tracks TCFD's four pillars. One demand doesn't: Appendix B industry-based metrics, drawn from SASB across 70+ industries, and now being amended standard by standard.
IFRS S2 is the ISSB's global climate disclosure standard. Issued June 2023 alongside IFRS S1 and effective for reporting periods on or after 1 January 2024, it sits on TCFD's four pillars (governance, strategy, risk management, metrics and targets), routes industry-specific metrics through SASB Appendix B across 11 sectors and 70+ industries, and requires the anticipated financial effects of material climate risks. Targeted amendments on GHG disclosure were issued in December 2025 and apply from 1 January 2027, with early application permitted.
Whoever the jurisdiction says. IFRS S2 only applies where adopted into national law. 28 jurisdictions had adopted the ISSB standards, voluntarily or mandatorily, by April 2026, with around a dozen more planning. In force today in Hong Kong, Australia (as AASB S2), Brazil, Chile, Mexico, Qatar, Pakistan, Nigeria, Turkey and others. The UK finalised UK SRS in February 2026 and Japan has mandated phased reporting from FY2027. Voluntary baseline available everywhere else for investor-driven disclosure.
IFRS S2 is the global baseline. Jurisdictions decide who reports.
The ISSB issues IFRS S2 as a single mandatory standard for climate-related financial disclosures. It only applies where a jurisdiction has adopted it into law. That makes it both the most widely-adopted climate standard in the world and the one most often filed alongside local variations.
IFRS S2 didn't replace TCFD. It built on it.
TCFD gave the world four pillars and the language of climate disclosure. IFRS S2 takes that scaffold and adds three demands TCFD never made: industry-specific metrics, quantified financial effects, and a global classification system that holds up across jurisdictions.
Cross-industry tells one story. Industry metrics tell yours.
IFRS S2 Appendix B requires entities to consider industry-based disclosure topics drawn from SASB Standards across 11 sectors and 70+ industries. Real estate, oil and gas, asset management, agriculture: each has its own metrics list, and the ISSB is now amending those standards in phases, with extreme-weather resilience among the topics being sharpened. Generic TCFD narratives don't satisfy this.
From describing risk to pricing it.
IFRS S2 paragraphs 15 to 21 require disclosure of current and anticipated financial effects of material climate risks and opportunities, qualitatively or quantitatively. Investors and assurance providers favour the latter, and with ISSA 5000 effective from December 2026 the assurance question stops being hypothetical.
Local mandates. Global data spine.
Australia layers Aus paragraphs. The UK finalised UK SRS in February 2026 with listed-company rules proposed from 2027. Japan phases in from FY2027. Canada's CSDS stays voluntary while OSFI makes it mandatory for banks and insurers. The standard is the same, the obligations differ, and multinationals win when one asset-level data set serves every filing.
The IFRS S2 framework: 7 chapters across two standards and four pillars.
IFRS S2 sits inside a tight architecture: IFRS S1 sets the general sustainability requirements, S2 specifies the climate disclosures, and Appendix B routes you through SASB's industry classifications. Click each section to unpack what's actually required.
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Chapter 1: ISSB & Jurisdictional Adoption
A standard the world adopts on its own terms.
The International Sustainability Standards Board (ISSB), established by the IFRS Foundation in 2021, develops the IFRS Sustainability Disclosure Standards. Standards apply only where a jurisdiction has adopted them into national law or regulation, which is why the same standard produces different obligations in different places.
- 28 jurisdictions had adopted the ISSB standards by April 2026, with around a dozen more planning
- In force today: Hong Kong, Brazil, Pakistan, Chile, Qatar, Mexico, Nigeria, Turkey and others
- Local variations: Australia (AASB S2), UK (UK SRS, final February 2026), Canada (CSDS), Japan (SSBJ), South Korea (KSDS, issued February 2026)
- Voluntary baseline available via the IFRS Foundation in non-adopting jurisdictions
- Jurisdictional Adopters Working Group convenes to address cross-border consistency
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Chapter 2: IFRS S1 General Requirements
The cross-cutting backbone.
IFRS S1 defines materiality, the connected information principle, value chain treatment, time horizons and the format of disclosures. It applies to all sustainability topics, not just climate, and underpins everything in IFRS S2.
- Materiality: information that could reasonably affect investor decisions
- Connected information: links between financial statements and sustainability disclosures
- Value chain: upstream and downstream, with proportionality reliefs
- Time horizons: short, medium, long-term, defined by the entity
- Disclosure location: in or alongside general purpose financial reports
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Chapter 3: IFRS S2 Governance
Who watches climate risk, and how.
Paragraph 6 of IFRS S2 sets out the governance disclosures: board oversight, management's role, and how climate is integrated into existing controls. Largely qualitative, but the details get audited where assurance applies, and from December 2026 ISSA 5000 gives assurance providers a common standard to test them against.
- Board and committee oversight processes for climate-related risks and opportunities
- Skills, experience and access to expertise on climate at the governance level
- Management's role in assessing, monitoring and managing climate risks
- Frequency of climate-related reporting to the board
- Integration with broader risk management and internal control frameworks
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Chapter 4: IFRS S2 Strategy
From hazard to financial effect.
The hard pillar. IFRS S2 paragraphs 9 through 22 cover material climate risks and opportunities, business model implications, transition planning, climate resilience analysis, and the anticipated financial effects of all of the above.
- Material climate-related risks and opportunities, classified as physical or transition
- Business model and value chain implications across time horizons
- Climate resilience assessment using climate-related scenarios (flexible scenario choice)
- Adaptation measures and resource allocation relied on to reach that resilience conclusion
- Current and anticipated financial effects, qualitative or quantitative
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Chapter 5: IFRS S2 Risk Management
How risks are identified, prioritised and integrated.
Process disclosures around how climate is woven into the entity's overall risk framework. The pillar is short on word count but heavy on rigour, and assurance teams test the inputs hard.
- Processes for identifying and assessing climate-related risks and opportunities
- Inputs and parameters used: data sources, scope, value-chain coverage
- Priority of climate risks within the overall enterprise risk management framework
- Monitoring, escalation and review cycles, with linkage to internal audit
- Changes from prior period, with explanation
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Chapter 6: IFRS S2 Metrics & Targets
Cross-industry baseline plus your industry's metrics.
Two metric sets sit in parallel. Cross-industry metrics apply to everyone, and one of them asks how much of the business is exposed to physical climate risk. Appendix B industry-based metrics then route to your SASB industry classification.
- The amount and percentage of assets or business activities vulnerable to physical climate risks
- Capital deployed toward climate-related risks and opportunities, including adaptation
- Scope 1, 2, 3 GHG emissions per the GHG Protocol Corporate Standard, with the December 2025 amendments applying from 2027
- Industry-based metrics from SASB Appendix B (11 sectors, 70+ industries), currently being amended in phases
- Targets: type, scope, base year, time frame, and progress to date
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Chapter 7: Interoperability & Assurance
From disclosure to assured filing.
IFRS S2 is designed to interoperate, and the surrounding regimes have moved. The EU adopted revised ESRS on 3 July 2026, applying from FY2027 with early application permitted. ISSA 5000 becomes effective for assurance engagements from 15 December 2026.
- TCFD: fully integrated; IFRS S2 effectively succeeds the TCFD recommendations
- SASB: embedded in Appendix B, with amendments under consultation standard by standard
- ESRS interoperability: joint EFRAG-ISSB guidance, against a revised ESRS that applies from FY2027
- Assurance: ISSA 5000 (IAASB) effective from 15 December 2026, with jurisdictional variations on limited or reasonable
- Nature: in April 2026 the ISSB opted for a voluntary practice statement rather than a standalone nature standard, with an exposure draft expected around October 2026
One data spine. Every jurisdictional filing.
Asset-level physical risk, industry-specific metrics, quantified financial effects, audit-grade methodology. The IFRS S2 data spine carries every component of the climate disclosure and every jurisdictional variant on top of it.
Industry-specific metrics
Appendix B routes you through SASB's classification across 11 sectors and 70+ industries. Real estate has its own metrics. So does oil and gas, asset management, agriculture. Generic Scope 1, 2, 3 won't satisfy this, and the standards themselves are being amended in phases.
Asset-level physical climate risk
Asset-level exposure across real estate, supply chain nodes and operational facilities. Country averages don't survive assurance, and they don't underwrite a credible adaptation plan.
Anticipated financial effects
IFRS S2 paragraphs 15 to 21 ask for current and anticipated financial effects across short, medium and long-term horizons. Qualitative is permitted, quantitative is preferred, and from December 2026 ISSA 5000 gives assurance providers a common standard to test the numbers against.
The vulnerable-asset percentage
One cross-industry metric asks for the amount and percentage of assets or business activities vulnerable to physical climate risk, and another for the capital deployed against those risks. Both are ratios you have to be able to defend, which means knowing where the assets are and what has been done to protect them.
Cross-jurisdictional portability
One asset-level data set serves IFRS S2, AASB S2, UK SRS, Canada CSDS and ESRS E1 disclosures. Multinationals win when the data spine carries every filing without a per-jurisdiction rebuild, and the jurisdictions keep multiplying.
A moving standard
GHG amendments issued December 2025 apply from 2027. SASB standards and the IFRS S2 industry-based guidance are under amendment. A disclosure built on a documented methodology absorbs those changes; one assembled by hand each year does not.
Physical climate risk data, built for IFRS S2 and every jurisdiction built on it.
Spectra is the physical climate risk data platform behind IFRS S2 disclosures at companies and financial institutions with over $13.5 trillion in combined AUM. One asset-level data spine serves IFRS S2, AASB S2, UK SRS, Canada CSDS, ESRS E1 and parallel TCFD-aligned filings.
Asset-level exposure, 2bn+ assets
Material physical climate risk for every asset in scope. 12 hazards, building-level vulnerability, geolocation precision down to address and parcel. The granularity IFRS S2 climate resilience analysis and Appendix B industry metrics demand, without country averages.
Multi-pathway scenarios
IPCC CMIP6 SSPs and CMIP5 RCPs covering low-warming and high-warming pathways. Short, medium and long-term horizons defined to your entity's planning cycle. NGFS scenarios for the financial sector view.
Hazard exposure to financial effect
Annual losses in monetary value, expected loss adjustments, business disruption risk and confidence intervals, plus the vulnerable-asset amounts and percentages the cross-industry metrics ask for. The translation IFRS S2 paragraphs 15 to 21 require, by horizon, by material asset, in the units assurance providers expect.
Adaptation, costed and evidenced
A resilience conclusion is only as good as the measures behind it. Adapt quantifies defence and retrofit options asset by asset, with capex, avoided loss and payback, so the strategy disclosure and the capital-deployment metric rest on documented measures rather than intentions.
Assurance-ready methodology
ISO 27001 and ISO 14001 certified, full methodology documentation and uncertainty disclosure. Built for the assurance regime ISSA 5000 formalises from December 2026, and ready to feed parallel ESRS, AASB S2, CSDS and SS5/25 filings.
Coverage that finds the assets
Carta maps the assets, subsidiaries and counterparties in scope before they are scored, which is where most Appendix B and value-chain disclosures actually break: not in the modelling, but in knowing what belongs in the denominator.
Are you ready for IFRS S2 climate disclosure?
Pick your industry. The financial-effects question tailors itself to your SASB classification and the metrics that matter most to your sector.
IFRS S2 readiness self-check
IFRS S2: the questions sustainability and finance leaders ask.
What is IFRS S2?
IFRS S2 is the ISSB's global climate disclosure standard, issued June 2023 alongside IFRS S1 (general sustainability requirements) and effective for reporting periods on or after 1 January 2024. Built on the four TCFD pillars (governance, strategy, risk management, metrics and targets), it adds three demands TCFD never made: industry-specific metrics drawn from SASB across 11 sectors and 70+ industries (Appendix B), quantified anticipated financial effects of material climate risks across short, medium and long-term horizons (paragraphs 15-21), and a globally consistent classification system that holds up across jurisdictions. Targeted amendments to the greenhouse gas disclosure requirements were issued in December 2025 and apply from 1 January 2027, with early application permitted.
Who has to comply with IFRS S2?
It depends on the jurisdiction. IFRS S2 is mandatory only where a country has adopted it into national law. By April 2026, 28 jurisdictions had adopted the ISSB standards on a voluntary or mandatory basis, with around a dozen more planning adoption. Requirements are in force in Hong Kong (effective 1 August 2025), Australia (as AASB S2, phased from 1 January 2025), Brazil (CBPS 01/02 for listed companies from 1 January 2026), Chile, Mexico, Qatar, Pakistan, Nigeria and Turkey among others. The UK published final UK SRS S1 and S2 on 25 February 2026, with the FCA proposing application to listed companies from 1 January 2027. Japan mandated ISSB-aligned reporting in February 2026, phasing from FY2027 for the largest listed companies. Outside adopting jurisdictions, IFRS S2 remains available as a voluntary baseline for investor-driven disclosure.
What's the difference between IFRS S2 and TCFD?
TCFD provided the four-pillar disclosure framework that IFRS S2 builds on. IFRS S2 effectively succeeds TCFD by making three things mandatory that TCFD only recommended: industry-specific metrics drawn from SASB through Appendix B (11 sectors, 70+ industries), quantified disclosure of current and anticipated financial effects of material climate risks across short, medium and long-term horizons (paragraphs 15-21), and a global classification system that holds up across jurisdictions. The TCFD itself disbanded in 2023 with the IFRS Foundation taking over monitoring of climate-related disclosures. Companies still reporting only against TCFD recommendations should expect to migrate as their jurisdiction adopts IFRS S2, and the UK's move from TCFD-aligned listing rules to UK SRS is the clearest example of how that transition looks in practice.
Which jurisdictions have adopted IFRS S2?
28 jurisdictions had adopted the ISSB standards by April 2026, with around a dozen more planning, and the shape of adoption varies. Already reporting: Hong Kong (1 August 2025), Australia (AASB S2, phased from 1 January 2025), Brazil (CBPS 01/02 from 1 January 2026), Chile, Mexico, Qatar, Pakistan, Nigeria and Turkey. Newly settled in 2026: the UK published final UK SRS S1 and S2 on 25 February 2026 with FCA rules proposed from 1 January 2027, Japan mandated phased reporting for its largest listed companies from FY2027, and South Korea issued KSDS 1 and 2 in February 2026 with timing still to be set. Canada's CSDS remains voluntary for issuers after the CSA paused its rule, though OSFI makes CSDS-aligned disclosure mandatory for federally regulated banks and insurers under Guideline B-15.
What is IFRS S2 Appendix B, and is it changing?
IFRS S2 Appendix B is the SASB-derived industry-based metrics requirement. Entities must consider industry-based disclosure topics drawn from SASB Standards across 11 sectors and 70+ industries. Real estate entities have their own metrics list. So do oil and gas companies, asset managers, banks, insurers, manufacturers and agricultural producers. Generic Scope 1, 2 and 3 emissions disclosure won't satisfy Appendix B by itself, which makes it the single biggest standing start for entities migrating from TCFD. It is also moving: the ISSB is running a phased programme to enhance the SASB Standards, and in early 2026 published proposed amendments to the Agricultural Products, Meat, Poultry & Dairy and Electric Utilities & Power Generators standards, with consequential amendments to the IFRS S2 industry-based guidance. Among the changes, electric utilities' grid resilience topic is being reframed around extreme weather and critical incident risk, which pushes industry metrics further toward physical exposure.
When does assurance apply to IFRS S2 disclosures?
Assurance is set jurisdictionally rather than by the ISSB, but the global reference point now has a date. ISSA 5000, the IAASB's general standard for sustainability assurance engagements, is effective for engagements beginning on or after 15 December 2026, with early adoption permitted. Jurisdictions differ on whether limited or reasonable assurance applies and on when it phases in, so the practical question is less "does assurance apply to us" than "which of our numbers can survive it". Climate figures that rest on documented methodology, disclosed uncertainty and traceable source data hold up. Figures assembled from country averages and spreadsheet judgement do not.
Does IFRS S2 expect anything on adaptation and resilience?
Yes, in the part of the standard that is hardest to write without data. IFRS S2 asks for an assessment of the climate resilience of the strategy and business model, informed by climate-related scenario analysis, and for the changes in resource allocation and business model that follow from it. The cross-industry metrics then ask for the amount and percentage of assets or business activities vulnerable to physical climate risks, and for the capital deployed toward climate-related risks and opportunities. Read together, those requirements ask what is exposed, what is being done about it, and what that costs. Adapt is built for the middle question, costing defence and retrofit options asset by asset so the resilience narrative rests on measures rather than intentions.
How does Climate X help with IFRS S2 disclosure?
Climate X provides asset-level physical climate risk data built for IFRS S2 climate resilience analysis, anticipated financial effects (paragraphs 15-21) and Appendix B industry-based physical risk metrics. The Spectra platform covers 2 billion+ assets globally across 12 hazards, with geolocation precision down to address and parcel, and multi-pathway scenarios using IPCC CMIP6 SSPs, CMIP5 RCPs and NGFS pathways across short, medium and long-term horizons. Adapt costs the response asset by asset for the resilience and capital-deployment disclosures. Methodology is ISO 27001 and ISO 14001 certified, built for the assurance regime ISSA 5000 formalises from December 2026, and serves parallel filings under AASB S2, UK SRS, Canada CSDS, ESRS E1 and SS5/25 from one data spine. Explore Spectra or talk to a climate risk expert about your IFRS S2 reporting cycle.
From hazard to financial effect.
Asset-level physical climate risk and adaptation data, ready for IFRS S2 disclosure and every jurisdictional filing built on it.
