Category: Climate insurance · Reviewed by Chrissie Anderson, Client Executive · Last reviewed 2026-06-10
IFRS S2 “Climate-related Disclosures” is the climate-specific sustainability reporting standard issued by the International Sustainability Standards Board (ISSB) in June 2023, effective for annual reporting periods beginning on or after 1 January 2024. It requires entities to disclose climate-related risks and opportunities — governance, strategy, risk management, metrics and targets — connected to the financial statements.
Category: Climate insurance Also known as: IFRS S2; Climate-related Disclosures Standard; ISSB S2 Established / Date: Published 26 June 2023; effective 1 January 2024 Related concepts: ISSB, TCFD, Climate change insurance
IFRS S2 is the second standard in the ISSB Sustainability Disclosure Standards series, following IFRS S1 “General Requirements for Disclosure of Sustainability-related Financial Information” (also June 2023). IFRS S2 builds directly on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and is structured around the same four pillars: governance, strategy, risk management, and metrics and targets.
The standard requires disclosure of: the entity’s governance of climate risks and opportunities; its strategy for addressing those risks and opportunities, including a transition plan; its risk management processes for identifying, assessing and prioritising climate risks; and the metrics and targets used, including scope 1, 2 and 3 greenhouse gas emissions, internal carbon prices and remuneration linked to climate.
IFRS S2 mandates use of climate-related scenario analysis to assess resilience and disclosure of how the analysis was performed, including the scenario(s) used and time horizons.
IFRS S2 was issued by the ISSB on 26 June 2023, effective for annual reporting periods beginning on or after 1 January 2024.[1] The ISSB was established at COP26 (3 November 2021) by the IFRS Foundation Trustees and consolidates predecessor frameworks including the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (which itself merged SASB and IIRC).[2]
In the United Kingdom, HM Treasury and the Department for Business and Trade are developing UK Sustainability Reporting Standards (UK SRS S1 and S2), with the policy intention that they will be substantially the same as IFRS S1 and S2 with limited UK-specific divergence. A UK endorsement decision is expected in 2026, after which the FCA will consult on referencing UK SRS in the Listing Rules. Until UK endorsement, listed issuers continue to apply LR 9.8.6R(8) (introduced by PS20/17, December 2020; extended by PS21/23, December 2021) and the Companies Act 2006 s.414CB disclosure regime under SI 2022/31.[3]
The TCFD was disbanded in October 2023 and its annual disclosure status report function transferred to the IFRS Foundation, which monitors IFRS S2 progress globally.[4]
UK insurers themselves apply IFRS S2 once UK endorsement (or equivalent jurisdictional adoption) takes effect. In the interim, many large UK insurers have produced “IFRS S2-aligned” or “TCFD/ISSB-aligned” disclosures to satisfy investor and regulator expectations. The PRA references the ISSB framework in its updated supervisory dialogue under SS 3/19, treating IFRS S2 disclosure as a useful evidence base for forward-looking scenario analysis.
For underwriting, IFRS S2 has two effects. First, it standardises the climate data that insureds present to insurers, reducing transaction friction. Second, it elevates the importance of accurate transition plan and scope 3 emissions data — both of which underpin D&O renewal questions and credit/political risk underwriting. Brokers will increasingly request the same data their clients are publishing under IFRS S2.
UK-listed entities and large unlisted entities anticipating UK SRS adoption should already be aligning internal climate reporting to IFRS S2’s four-pillar structure. Mid-sized businesses can use IFRS S2 as a best-practice framework even before mandatory application: the standard is the de facto global baseline.
For insurance buying, IFRS S2 simplifies submissions to D&O, financial lines and large property insurers, because climate governance, scenario analysis and transition plan documentation are produced as part of the annual report rather than re-prepared for each renewal.
A UK-listed asset manager publishes its first IFRS S2-aligned disclosure for the year ended 31 December 2025, including scope 1, 2 and 3 emissions, an internal carbon price of £75/tCO2e and a transition plan validated by SBTi. The disclosure forms part of its D&O renewal submission; the lead insurer accepts standard terms with no climate-specific exclusion and a £5m Side A drop-down. The Climate VaR of -1.2% on AUM under NGFS Delayed Transition is referenced in the underwriting file.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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