IFRS S2 - Climate-related disclosures standard

IFRS S2 is the international standard issued by the International Sustainability Standards Board (ISSB) that sets out how companies should disclose climate-related risks and opportunities in their corporate reporting. Published in June 2023, it is designed to be applied together with IFRS S1 and responds to growing demand from investors and financial markets for reliable, comparable and decision-useful information on how companies manage climate change.

IFRS S2 is effective for annual reporting periods beginning on or after 1 January 2024, with earlier application permitted. By 2026, more than 20 jurisdictions representing over half of global GDP had adopted or were adopting the ISSB standards, and in December 2025 the ISSB issued targeted amendments to ease certain aspects of implementation (notably parts of the Scope 3 and financed-emissions requirements).

What IFRS S2 is

IFRS S2 focuses exclusively on climate change. It defines how companies report the way they identify, assess and manage the current and anticipated effects of climate on their business model, strategy and financial performance. It builds on the recommendations of the former Task Force on Climate-related Financial Disclosures (TCFD), whose monitoring responsibilities have been taken over by the IFRS Foundation, and requires the information to be consistent with the figures presented in the financial statements.

Key content of IFRS S2

1. Governance: how the board and management oversee climate-related risks and opportunities.
2. Strategy: how climate change affects the company's strategy, business model and financial planning.
3. Risk management: processes to identify and manage physical risks (such as floods or droughts) and transition risks (such as regulation or technological change).
4. Metrics and targets: reporting of greenhouse gas emissions, including Scope 1, Scope 2 and, where relevant, Scope 3, measured in line with the GHG Protocol.
5. Climate scenario analysis: describing how different scenarios (for example 1.5°C or 2°C of warming) would affect the company's resilience.

Why it matters for companies

Adopting IFRS S2 offers clear advantages, whether reporting is mandatory in a given market or voluntary:

• Access to green and climate finance: banks and investors value companies with clear climate strategies.
• Anticipating regulation: it helps prepare for national rules on emissions and ESG reporting.
• Competitive advantage in tenders and supply chains.
• Better management of reputational, operational and regulatory risk.

IFRS S2 and the standards in Mexico

Mexico became one of the first countries in the Americas to mandate ISSB-aligned disclosure, with requirements taking effect from 2026 (based on 2025 data) for issuers supervised by the National Banking and Securities Commission (CNBV). For other entities, the Mexican Financial Reporting Standards Board (CINIF) has developed the Sustainability Reporting Standards (NIS), including NIS B-1, which incorporate environmental indicators aligned with IFRS S2, such as the carbon footprint and energy consumption.

Putting it into practice

Organisations of all sizes can begin adopting IFRS S2 by assessing their climate footprint, integrating scenario analysis and publishing climate disclosures as part of their annual or sustainability reports. This improves transparency, strengthens environmental commitment and prepares the company for assurance and climate-related certifications. It connects closely with implementing ESG strategies.

IFRS S2 establishes climate change as a decisive factor in how companies are assessed financially. At Manglai we help companies measure their carbon footprint and prepare the climate data and disclosures these standards require. Discover how Manglai can help you.