IFRS S2 does not require you to have a climate transition plan, and does not require you to publish one. What it requires is information about your strategy to meet a plan if you have one, under paragraph 14(a)(iv), together with the key assumptions behind it and the dependencies it relies on. It also asks for progress against previously reported plans, which is the part that compounds: what you disclose this year becomes the benchmark you answer against next year.
Key points
- IFRS S2 does not require an entity to have a transition plan, or to publish one.
- It requires information about the entity’s strategy to meet its transition plan if it has one. Paragraph 14(a)(iv) is the relevant requirement.
- Where a plan exists, the key assumptions used in developing it and the dependencies it relies on are part of what is disclosed.
- Progress against previously reported plans is disclosed too, which makes last year’s disclosure this year’s benchmark.
- Having no formal plan does not remove the obligation to explain how any targets you have set will be achieved.
A requirement that is conditional, and a record that is not
The question people arrive with is whether IFRS S2 forces them to produce a transition plan. It does not. The IFRS Foundation’s June 2025 guidance is explicit: the standard does not require an entity to have a transition plan nor require an entity to publish a transition plan as long as the requirements in IFRS S2 are met.
Nor does it require you to disclose the plan itself. As the guidance puts it, IFRS S2 requires an entity to provide information about the entity’s strategy to meet its transition plan if it has one. Paragraph 14(a)(iv) is where the obligation sits.
That is a genuine relief for a company that has set no targets and made no public commitments. It is a much smaller relief than it looks for everyone else, and the reason is worth understanding before you decide how much to write.
What you disclose either way
The guidance sets out the information an entity provides about its climate-related transition. Read as a list it covers what plan, if any, the entity has, including the key assumptions used in developing it and the dependencies it relies on; how the entity plans to achieve its climate-related targets, including any greenhouse gas targets; how it is resourcing, or plans to resource, its response; and what progress it has made against previously reported plans.
Notice how little of that is conditional on having a formal plan. If you have set a target, you have to say how you intend to meet it and how it is resourced. The absence of a document called a transition plan does not remove those.
The guidance works through this directly with an entity that has a strategic goal but no formal plan, and an entity with a formal plan. The second discloses more, but the first is not silent.
Assumptions and dependencies are the demanding part
Where a plan does exist, two items in that list are heavier than the rest: the key assumptions used in developing it and the dependencies on which it relies.
Both are judgements about the future made at a point in time. A plan that assumes grid decarbonisation at a particular rate, or a technology being commercially available by a particular year, or a policy incentive continuing, is resting on things outside the company’s control. Disclosing them is what makes the plan legible rather than aspirational.
It also creates an evidence obligation that is easy to miss. Once an assumption is disclosed, it is a statement of what you believed and when. If it changes, the change is visible against last year’s report, and somebody will ask when you knew. The defensible position is a dated record of the assumption, its basis, and who accepted it, which is the same discipline that applies to the inputs and assumptions behind a scenario analysis.
Progress is the obligation that compounds
The item that changes the shape of the work over time is progress against previously reported plans.
In a first cycle a transition plan disclosure is a description of intent, and it is not hard to write. From the second cycle onwards it is a comparison. What you said last year is the benchmark, and the disclosure has to address movement against it, including where there has been none.
That is why the first year matters more than it appears. A vague first disclosure is easier to write and harder to report against, because there is nothing specific to measure progress towards. A specific one is more work now and answerable later. Teams routinely optimise for the wrong one of those.
It also means the supporting record has to survive across reporting cycles rather than being assembled per report. The version of the plan you disclosed against, the assumptions current at that time, and the approval attached to it are all things you will need in a year, when the people involved have moved on and the working file has been edited many times.
How this connects to targets you have already set
Most companies reach this requirement from the target side rather than the plan side. A public commitment was made, sometimes years before IFRS S2 applied, and the reporting obligation now attaches to it.
The practical question is whether the commitment is supported by anything you could show. A target with a stated base year, a defined boundary, a method for measuring progress, and a record of who approved it is straightforward to report against. A target announced in a press release, with no recorded boundary, is where first cycles get uncomfortable, because the disclosure has to describe how it will be achieved and the honest answer is not documented anywhere.
Neither problem is solved by software, and it would be dishonest to suggest otherwise. What a controls system does is hold the record once it exists: Auditably keeps the disclosure requirements as tracked items, attaches the supporting document to each one, records review and approval against named users, and writes changes to a log that cannot be edited afterwards, so the assumption you disclosed this year is still retrievable next year with its date and its approver attached. It does not write transition plans, model decarbonisation pathways, or advise on whether a target is credible. The boundary is set out on the coverage page, the price is published on the pricing page, and the append-only claim behind the log can be tested on a live tenant without an account.
Common questions
Does IFRS S2 require a transition plan?
No. The IFRS Foundation’s guidance states that IFRS S2 does not require an entity to have a transition plan, nor to publish one, as long as the requirements in IFRS S2 are met. What it requires is information about the entity’s strategy to meet its transition plan if it has one.
What must I disclose if I do have a plan?
That you have one, under paragraph 14(a)(iv), together with information about it including the key assumptions used in developing it and the dependencies on which it relies, how the targets in it will be achieved, and how the response is resourced.
What if I have targets but no formal plan?
You still disclose how you plan to achieve those climate-related targets, including any greenhouse gas targets, and how you are resourcing your response. The absence of a formal plan document does not remove those requirements.
Do I have to report progress each year?
Information about progress against previously reported plans is part of what an entity discloses. In practice that means the first disclosure becomes the benchmark for the second, and specificity in year one makes year two easier rather than harder.
What happens when a disclosed assumption turns out to be wrong?
An assumption that changes is not a failure; it is the normal course of a multi-year plan. What matters is being able to show what was assumed, on what basis, and when it changed. That is a records question rather than a drafting one.
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The statements that IFRS S2 does not require an entity to have or publish a transition plan, that it requires information about the entity's strategy to meet its transition plan if it has one, the reference to paragraph 14(a)(iv), and the list of information disclosed including key assumptions, dependencies and progress against previously reported plans, are all taken from the IFRS Foundation's June 2025 guidance document on disclosing information about an entity’s climate-related transition. That document builds on material authored by the Transition Plan Taskforce, for which the Foundation assumed responsibility in 2024. It states that it is not part of IFRS Standards and does not change the requirements in them; we have used it as explanatory material rather than as a substitute for the Standard, which sits behind the Foundation's registration wall.
Product statements describe what the software does at the date of publication. We have no customers yet and therefore no case studies or engagement data, and we have not implied otherwise. This is a general summary and not advice on your own targets, plan or disclosures.