ISSB Releases Guidance on Transition Plans Under IFRS S2: What It Means for Your Reporting
We explore the new guidance from the ISSB on transition plans as well as a series of other important regulatory developments from the past week. See how these new requirements relate to each other
The ISSB has issued new guidance on how companies should report transition-related disclosures under IFRS S2. This guidance provides detailed expectations for disclosing governance, strategy, targets, and progress of transition plans. The IFRS climate standard requires material information about how climate-related risks and opportunities are being addressed.
Also in this issue:
The UK’s Climate Change Committee warns that 39% of planned emissions reductions lack credible delivery pathways
GRI launches new Climate and Energy standards, aligned with the GHG Protocol and interoperable with ISSB rules
The UK Government publishes draft sustainability reporting standards for consultation, based on IFRS S1 and S2
And from our podcast:
The future of nuclear energy. With billions pouring into next generation technologies, will nuclear be part of the solution or simply an expensive distraction? Listen here.
IFRS Releases Transition Plan Guidance Under Climate Standard
The IFRS Foundation has published new implementation guidance to support companies applying IFRS S2 on climate-related disclosures, with a particular focus on transition plans. While IFRS S2 does not require a company to have a formal transition plan, it does require disclosure of material information about how a company is addressing climate-related risks and opportunities. The guidance outlines how firms should report on strategy, governance, targets, actions and resources, and builds on the work of the UK Transition Plan Taskforce. It is designed to promote global consistency in disclosures while allowing jurisdictions to set complementary requirements, such as alignment with 1.5°C pathways.
Key takeaways for leaders:
IFRS S2 requires companies to disclose material climate exposures and actions. Transition planning must now be part of mainstream corporate strategy.
Disclosures must explain how leadership oversees and funds the transition, and how progress is measured and managed over time.
Investors will expect transparency on assumptions and dependencies, such as supply chain constraints or new technologies.
Firms reporting across jurisdictions should anticipate additional requirements from national regulators and plan for dual alignment.
Read more from the IFRS.
The UK CCC Report: UK Emissions Falling, But Policy Gaps Remain
The UK has cut territorial greenhouse gas emissions by more than half since 1990, driven largely by the transition from coal to renewables in the power sector. The Climate Change Committee’s 2025 report shows emissions fell by 50.4 % in 2024. However, only 61 % of the reductions needed to meet the UK’s 2030 target are backed by credible or partially credible plans. Key areas such as heat pumps and industrial electrification lack clear delivery pathways. Despite previous recommendations, the government has made no progress on rebalancing electricity costs to encourage electrification. Meanwhile, emissions from aviation are rising and now exceed those from electricity generation.
Key takeaways for leaders:
Hitting the UK’s 2030 climate target will require faster policy action in buildings, industry and heat.
High electricity prices remain a barrier to electrification. Leaders should plan for policy-driven changes to cost structures.
Technology uptake in EVs and renewables shows progress is possible, provided incentives align with long-term goals.
A credible energy and industrial strategy is needed this year to address remaining gaps and maintain investor confidence.
Read more from the CCC.
GRI Launches New Climate and Energy Standards
The Global Reporting Initiative has released two new standards: GRI 102: Climate Change and GRI 103: Energy, to strengthen corporate accountability and streamline climate reporting. GRI 102 centers on GHG emissions reductions as the key mitigation lever, grounded in science-based targets and global climate goals. It incorporates disclosures on justice impacts for workers, communities, and Indigenous Peoples. Crucially, it has been designed to be interoperable with IFRS S2 from the ISSB, supporting consistent reporting across double and financial materiality frameworks. GRI 103 covers all energy-related activities, highlighting how organizations reduce consumption and shift to renewables. Both standards are aligned with the GHG Protocol and structured to support decision-useful reporting for regulators, investors, and civil society.
Key takeaways for leaders:
These standards raise the bar on climate accountability, with integrated disclosure expectations on emissions, energy, and equity.
Interoperability with IFRS S2 provides a clear path for firms reporting under both impact and financial materiality frameworks.
Leaders should expect increasing scrutiny of decarbonization claims, especially around energy use and social impacts.
Alignment with the GHG Protocol means data can now support multiple regulatory and voluntary requirements more efficiently.
Read more from the GRI.
UK Releases Draft Sustainability Standards for Consultation
The UK government has published draft versions of its new corporate sustainability reporting standards, UK SRS S1 and S2, based on the global ISSB framework. These standards set out disclosure requirements on general sustainability issues (S1) and climate-specific risks and opportunities (S2). While largely aligned with IFRS, the UK proposes key amendments: removing the option to delay sustainability disclosures, extending “climate-first” transition relief to two years, dropping mandatory GICS classifications, softening references to SASB guidance, and eliminating IFRS-dated requirements. Stakeholders have until 17 September 2025 to respond, with final standards expected this autumn. The rules will underpin mandatory disclosures for UK-listed and large companies via FCA and Companies Act channels.
Key takeaways for leaders:
These standards signal the UK's move toward international alignment but with UK-specific flexibility—firms must prepare for phased, but mandatory, reporting.
Leaders should begin reviewing data readiness and assurance pathways, especially given the removal of deferred disclosure options.
A two-year climate-first window gives space to build capacity, but expectations on connectivity with financial reporting are high.
Engagement in the consultation process is critical to shaping workable, proportionate final rules.
Read more from the UK Govt
At D.A. Carlin & Co., we help business and government leaders navigate this complex and fast-changing landscape. Whether you're planning for global compliance, mobilizing investment, or scaling resilient strategies, we’re here to support you. Get in touch at info@dacarlin.com to learn more.