COMPLIANCE & REGULATORY
IFRS S2 — Climate-related Disclosures — requires organizations to identify, assess, and disclose material climate-related risks and opportunities as part of their core financial reporting. Not as a standalone sustainability report. Not as an annex. As a material component of the annual report, subject to the same investor scrutiny and assurance standards as financial statements.
For listed companies, financial institutions, and large organizations adopting ISSB-aligned disclosure frameworks, IFRS S2 represents a fundamental change in how climate risk is governed, measured, and communicated. The data requirements are extensive, the scenario analysis demands are technical, and the investor expectations are high. Semtrio designs the disclosure system to meet all three.
IFRS S2 requires climate-related risk and opportunity disclosures to appear within the annual financial report — under the same governance, assurance, and materiality standards that apply to financial statements. Organizations that treat IFRS S2 as an extension of their sustainability report are structurally misaligned with the requirement.
IFRS S2 applies to organizations whose jurisdictions or stock exchange listing requirements mandate ISSB-aligned disclosure — a rapidly expanding group that includes listed companies across multiple markets, financial institutions with international investor bases, and large organizations subject to mandatory climate disclosure regulations.
IFRS S2 requires organizations to assess climate-related risks and opportunities under multiple climate scenarios, quantify their financial impact, and disclose how the organization's strategy and business model are affected. This goes substantially beyond what most organizations currently produce in their sustainability reporting.
The technical requirements of IFRS S2 — scenario analysis, physical and transition risk quantification, cross-industry metric categories, and industry-based disclosure requirements from SASB — require a structured delivery approach that connects climate science, financial modeling, and corporate governance into one coherent output. Organizations that attempt to meet IFRS S2 requirements through their existing sustainability reporting process typically discover that the data is incomplete, the scenario analysis is absent, and the financial quantification is not audit-ready.
Semtrio's IFRS S1/S2 advisory is built around the full disclosure lifecycle: gap analysis against the standard's requirements, data architecture to collect what is missing, scenario analysis using recognized climate scenarios (IEA, IPCC), financial impact quantification, and final disclosure design produced to the standard investors and auditors expect. We do not deliver templates and guidelines. We deliver the disclosure.
Our methodology connects IFRS S2 outputs with existing GHG accounting, CDP Climate disclosure, and GRI reporting — meaning the data collected for IFRS S2 strengthens every other framework simultaneously. One data architecture. No duplication.
OUR PROCESS
A complete IFRS S1/S2 disclosure system — from readiness assessment to investor-grade output.
IFRS S2 requires disclosure of Scope 1, 2, and 3 GHG emissions as cross-industry metrics — a defensible, methodology-aligned GHG inventory is the non-negotiable data foundation for any IFRS S2 disclosure.
Learn moreIFRS S2's materiality assessment — identifying which climate risks and opportunities are material to the business — shares methodology with the double materiality assessment required under CSRD, making both more efficient when delivered together.
Learn moreFor organizations that also produce GRI-aligned sustainability reports, Semtrio designs IFRS S2 data architecture to feed both frameworks from a single collection process — eliminating duplication when IFRS S2 and GRI reporting are managed as separate workstreams.
Learn moreIFRS S2 scenario analysis and climate risk governance directly supports CDP Climate scoring — organizations preparing IFRS S2 disclosure are simultaneously building the data infrastructure that improves CDP performance.
Learn moreWe authored the TCFD Climate Transition Report for an ArcelorMittal joint venture — and we bring that same rigor to IFRS S2.
IFRS S2 is built on the foundations of TCFD — the same governance structure, the same scenario analysis requirements, the same financial risk and opportunity framing. Semtrio authored the TCFD Climate Transition Report for Borçelik — a joint venture of Borusan Holding and ArcelorMittal, the world's largest steel producer — applying the scenario analysis, climate risk governance, and financial quantification methodology that IFRS S2 has since formalized as a global disclosure standard. That engagement required precisely the skills that IFRS S2 demands: connecting climate science with financial modeling, governing the disclosure through board-level accountability structures, and producing outputs that hold up under investor and auditor scrutiny.
Semtrio tracks how IFRS S1 and S2 are being interpreted, applied, and audited across the jurisdictions that have adopted them — from early movers like the UK and Australia to markets still finalizing their transposition. For organizations navigating IFRS S2 for the first time, that depth of framework knowledge is what separates a compliant disclosure from a credible one.
Assess your IFRS S2 readiness with our teamWhether you're scoping a single service engagement, evaluating end-to-end advisory across multiple clusters, or looking for one accountable partner across strategy and disclosure — start here.
Yaren Ünal
Senior Specialist,Client Solutions
Hamza Söylemez
Specialist,Client Solutions
Frequently asked questions about IFRS S1/S2
IFRS S2 — Climate-related Disclosures — is a standard issued by the International Sustainability Standards Board (ISSB) that requires organizations to disclose material climate-related risks and opportunities within their core financial reporting. Unlike sustainability reports, IFRS S2 disclosure is integrated into the annual financial report and is subject to the same governance, materiality, and assurance standards that apply to financial statements. The standard requires disclosure across four pillars: governance (how the board oversees climate-related risks and opportunities), strategy (how climate affects the organization's business model and financial planning), risk management (how climate risks are identified, assessed, and managed), and metrics and targets (including Scope 1, 2, and 3 GHG emissions and climate scenario analysis).
IFRS S1 — General Requirements for Disclosure of Sustainability-related Financial Information — is the overarching standard that establishes the framework, principles, and general requirements for all sustainability-related financial disclosures. IFRS S2 is the specific standard focused on climate — it provides detailed requirements for how climate-related risks and opportunities must be identified, measured, and disclosed. IFRS S1 and S2 work together: S1 sets the governance and reporting architecture; S2 applies that architecture specifically to climate. Organizations subject to IFRS S2 are also required to apply IFRS S1 as the foundational framework.
IFRS S2 applies to organizations whose jurisdictions or listing requirements mandate ISSB-aligned disclosure. The ISSB does not directly enforce disclosure requirements — adoption is determined by national regulators, stock exchanges, and financial market authorities that incorporate IFRS S1 and S2 into their regulatory frameworks. Listed companies, financial institutions, and large organizations in jurisdictions that have adopted ISSB standards are in scope. Several major markets — including the UK, Australia, Japan, Singapore, and Canada — have adopted or are actively implementing ISSB-aligned mandatory disclosure requirements. Organizations with international investor bases or cross-border regulatory exposure should assess their applicability proactively, as requirements are expanding across markets simultaneously.
IFRS S2 requires organizations to assess the resilience of their strategy and business model against a range of climate scenarios — including at least one scenario consistent with limiting global warming to 1.5°C. The scenario analysis must cover both physical risks (the direct impacts of climate change on assets, operations, and supply chains) and transition risks (the financial effects of the shift to a lower-carbon economy, including policy changes, technology shifts, and market responses). Organizations are expected to quantify the financial impact of material climate risks and opportunities under each scenario — not just describe them qualitatively. The scenarios used must be recognized (typically IEA, IPCC, or NGFS pathways), and the methodology must be documented to a standard that supports external assurance.
Semtrio's IFRS S1/S2 advisory covers the full disclosure lifecycle across four structured phases. We begin with a gap analysis — evaluating current disclosure practices, governance structures, and data availability against the full requirements of IFRS S1 and S2, producing a structured assessment of what is in place and what needs to be built. We then design the data architecture and conduct scenario analysis using recognized climate pathways — quantifying the financial impact of physical and transition risks at the level of precision IFRS S2 requires. We draft the complete IFRS S2 climate disclosure, structured for integration into the annual financial report, cross-referenced with GRI, CDP, and CSRD to eliminate duplication. Finally, we support the assurance preparation process — preparing documentation and responding to auditor queries to ensure the disclosure meets the evidentiary standard expected by external assurance providers.
Talk to our team about your IFRS S2 readinessWhether you are approaching your first IFRS S2 disclosure or strengthening an existing one for investor and auditor scrutiny — we will assess your gaps, design the data architecture, and produce the output to the standard the standard demands.
Whether you are approaching your first IFRS S2 disclosure or strengthening an existing one for investor and auditor scrutiny — we will assess your gaps, design the data architecture, and produce the output to the standard the standard demands.
