IFRS Foundation: Guidance on disclosures about transition plans

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IFRS Foundation: Guidance on disclosures about transition plans

• 07 August 2025
• Sustainability Reporting
• South African Accounting Academy

Summary:

The IFRS Foundation has published a new guidance document: Disclosing information about an entity’s climate-related transition, including information about transition plans, in accordance with IFRS S2 as part of its commitment to supporting the implementation of IFRS Sustainability Disclosure Standards (ISSB Standards). 

Article:

This document provides guidance to enable entities to provide high-quality information about their transition towards a lower-carbon and/or climate-resilient economy when applying IFRS S2.

The document builds on disclosure-specific material developed by the Transition Plan Taskforce (TPT), for which the IFRS Foundation took responsibility in 2024.

The guidance:

• supports entities applying IFRS S2 Climate-related Disclosures;
• is designed to enable entities to provide high-quality information about their climate-related transition when applying IFRS S2; and
• covers disclosures about any ‘transition plan’ an entity has, including both mitigation and adaptation efforts.

This is designed to address fragmentation of disclosures about transition plans, building on the disclosure-specific materials developed by the Transition Plan Taskforce, and to support the ISSB global baseline and its implementation. 

Requirements in IFRS S2

Although IFRS S2 does not require an entity to have a transition plan, it does require an entity to provide material information about the sustainability-related risks and opportunities that could reasonably be expected to affect its prospects. This includes information about its climate-related transition because it relates to how the entity mitigates and adapts to climate-related transition and physical risks.

This guidance document:

• explains that an entity’s climate-related transition is a process through which the entity, in the context of its overall strategy, pursues targets, undertakes actions or deploys resources to respond to climate-related risks and opportunities.
• explains to entities the information that it is necessary to disclose when applying IFRS S2, if the entity has set a strategy for its transition to a lower-carbon and/or climate-resilient economy (for example, reducing its greenhouse gas emissions and adjusting its business model to become more resilient to climate-related physical risks).
• sets out guidance on disclosures about entities’ climate-related transitions. The document complements materials provided by jurisdictions or others that set out requirements or recommendations to create transition plans and the content of such plans.

Click here to download the 66-page document:

https://www.ifrs.org/content/dam/ifrs/supporting-implementation/ifrs-s2/transition-plan-disclosure-s2.pdf 

Relevance to Auditors, Independent Reviewers & Accountants:

• It is important to stay informed on publications issued by the regulators and standard-setters, e.g. IFAC, ISSB, etc.
• As an auditor, independent reviewer, accountant or practitioner, you ned to be aware of the latest guidance on sustainability issued by relevant regulators, such as the IFRS Foundation.
• This document provides guidance to enable entities to provide high-quality information about their transition towards a lower-carbon and/or climate-resilient economy when applying IFRS S2.

Relevance to Your clients:

• It is important to stay informed on publications issued by the regulators and standard-setters, e.g. IFAC, IFRS Foundation, ISSB, etc.
• This document provides guidance to enable entities to provide high-quality information about their transition towards a lower-carbon and/or climate-resilient economy when applying IFRS S2.

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