The report is the last step. What decides whether an IFRS S2 disclosure holds up is underneath it: a financed emissions baseline, scenario analysis connected to the risk framework, and governance the board actually runs.
ESGweise prepares IFRS S1 and IFRS S2 sustainability and climate disclosures for banks, listed companies and industrial groups across the GCC and Jordan. The work covers the four IFRS S2 pillars, climate risk assessment and NGFS scenario analysis, Scope 3 and financed emissions under PCAF, and, where an entity has one, the transition plan it must disclose, built to the IFRS Foundation's June 2025 guidance.
Four pillars, two standards
IFRS S1 sets the general requirements for sustainability disclosure. IFRS S2 applies them to climate. Both follow the four TCFD pillars, so a bank that reported to TCFD has a structure to build on, but IFRS S2 is considerably more specific about the numbers.
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01 Governance
Who oversees climate risk and opportunity, at board and management level, and how that oversight actually works.
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02 Strategy
Material climate risks and opportunities, their effect on the business model and financial position, scenario analysis, and any transition plan.
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03 Risk management
How climate risks are identified, assessed and managed, and how that is integrated into the entity's overall risk process.
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04 Metrics and targets
Scope 1, 2 and 3 emissions, including financed emissions for banks, industry metrics, and progress against climate targets.
Arriving through regulators, one market at a time
- Jordan. The Amman Stock Exchange framework makes IFRS S2 and the climate-relevant parts of IFRS S1 mandatory for ASE20 companies for periods beginning on or after 1 January 2026, first published in 2027. See what ASE20 banks must disclose.
- Qatar. The Qatar Central Bank has moved to make IFRS S1 and S2 mandatory for banks from FY2026 reporting. See IFRS S1 and S2 in Qatar.
- UAE. The Central Bank's climate risk regulation sets expectations for how banks govern and manage climate risk. IFRS S2 is the natural structure for disclosing it. See CBUAE climate risk regulation.
- Elsewhere in the GCC. Exchanges and central banks are converging on the ISSB standards at different speeds. How the six GCC central banks compare.
These positions move. We confirm the current requirement with the relevant regulator at the start of every engagement rather than working from last year's summary.
From gap assessment to a disclosure that holds up
- IFRS S1 and S2 gap assessment. Current reporting tested against every disclosure requirement, with the gaps ranked by how long they take to close, not by how they look.
- Climate risk assessment and scenario analysis. Physical and transition risk across the portfolio or asset base, using NGFS scenarios where the supervisor expects them, connected to the existing risk framework.
- Scope 3 and financed emissions. Built to the PCAF methodology for banks, with data quality scored honestly rather than concealed. This is the schedule driver for everything downstream.
- Disclosure drafting. The IFRS S1 and S2 disclosures themselves, written so each statement traces to evidence an assurance provider can test.
- Transition plans, where one exists or is needed. Built to the IFRS Foundation's June 2025 guidance, with sector detail from the TPT Banks guidance, and target setting including SBTi where that route is chosen.
Independent assurance of the finished disclosure is a separate engagement. We provide it through our assurance practice, but not on disclosures we helped prepare, so for any reporting period a client gets one or the other.
Work out who is actually asking before you build the plan
IFRS S2 does not require a transition plan. It requires one to be disclosed if it exists. Most plans are commissioned for a different reason, and that reason decides what the plan must contain and who has to accept it.
- A prudential regulator is usually asking for climate risk management integrated into governance and risk appetite, not a transition plan.
- A lender or development finance institution attaches specific, testable conditions to facilities.
- An index or rating scores the plan against published criteria and compares it with peers.
- A parent or shareholder is often the most demanding audience, and the least visible from outside the group.
The baseline starts first
The most common scheduling error is treating the disclosure as the project. Given a sound emissions baseline and a working scenario model, the writing is quick. Neither of those is, and they cannot be shortened by adding people.
So scoping, the gap assessment and the emissions baseline run in parallel from week one, and the risk assessment runs alongside the baseline rather than after it. The framework position we work to is current: the Transition Plan Taskforce closed in October 2024 and its material moved to the IFRS Foundation, which published its own guidance on 23 June 2025, and GFANZ restructured in January 2025.
Related work sits in sustainability reporting, carbon and GHG, and our banking and financial services practice. Financial risk modelling, ICAAP and stress testing are delivered through our sister practice.
IFRS S1/S2 & Climate Risk — questions we hear most
What is the difference between IFRS S1 and IFRS S2?
IFRS S1 sets the general requirements for disclosing sustainability-related risks and opportunities that could reasonably affect an entity's prospects. IFRS S2 applies those requirements to climate specifically, covering physical and transition risk, greenhouse gas emissions including Scope 3, scenario analysis and any transition plan. Both are issued by the International Sustainability Standards Board and are built on the four TCFD pillars: governance, strategy, risk management, and metrics and targets.
Is IFRS S2 mandatory in the GCC and Jordan?
It depends on the jurisdiction and the type of entity, and it is moving. In Jordan, the Amman Stock Exchange framework makes IFRS S2 and the climate-relevant parts of IFRS S1 mandatory for ASE20 companies for reporting periods beginning on or after 1 January 2026. In Qatar, the Qatar Central Bank has moved to make IFRS S1 and S2 mandatory for banks from FY2026. Elsewhere the requirement usually arrives through a central bank or exchange rule, so confirm the position with the relevant regulator rather than generalising across the region.
What makes IFRS S2 hard for a bank?
Two things, and neither is writing. Scope 3 financed emissions, which for a bank are by far the largest part of its footprint and depend on counterparty data most banks do not hold in usable form. And climate scenario analysis, which has to connect to the bank's existing risk framework rather than sit beside it. Both are data and methodology problems that take months, so they set the schedule for the whole disclosure.
Does IFRS S2 require us to have a transition plan?
No. IFRS S2 requires disclosure of a climate-related transition plan if the entity has one, at paragraph 14(a). It does not oblige an entity to prepare one. This is the commonest error in published commentary on the standard, and it matters commercially: if IFRS S2 is not the driver, something else is, and identifying which determines what the plan has to contain and who has to be satisfied by it.
Which framework should a transition plan be built to?
The IFRS Foundation guidance published on 23 June 2025 is the current authority. The Transition Plan Taskforce closed in October 2024 and its disclosure material transferred to the IFRS Foundation, so TPT documents remain useful as the structure beneath that guidance rather than as a standalone authority. GFANZ material is still widely used for financing levers and worked examples, though GFANZ restructured in January 2025 and should not be described as it was in 2022.
What is the difference between climate risk management and a transition plan?
Climate risk management is inward-facing: how physical and transition risks affect the institution's own balance sheet, capital and operations, and how that is governed. A transition plan is outward-facing: what the institution intends to do about its own contribution to emissions. An organisation can have rigorous climate risk management and no transition plan and be entirely compliant. Conflating them leads to building the wrong deliverable.
Thirty minutes. We figure out if there's a fit.
We don't pitch on the call. We listen, ask sharp questions, and tell you honestly whether ifrs s1/s2 & climate risk is what you need — or what else might be.
Speak with our team