Effective Dates, Transition Reliefs and First-Year Reporting

Effective Date: Original Standard

IFRS S2 was published in June 2023 and is effective for annual reporting periods beginning on or after 1 January 2024 (paragraph C1). This means:

• A 31 December year-end entity: first IFRS S2 report covers the year ending 31 December 2024
• A 31 March year-end entity: first IFRS S2 report covers the year ending 31 March 2025

Earlier application is permitted, but only if the entity also applies IFRS S1 simultaneously. Entities cannot selectively apply IFRS S2 without IFRS S1's general framework.

Effective Date: 2025 Amendments

The December 2025 amendments to GHG Emissions Disclosures (paragraphs 29A to 29C and related changes) are effective for annual reporting periods beginning on or after 1 January 2027 (paragraph C1B), with earlier application permitted.

First-Year Transition Reliefs (C3 to C5)

The ISSB designed three significant transition reliefs for entities applying IFRS S2 for the first time, reflecting the practical challenges of building climate disclosure systems:

Relief 1: No Comparative Information Required (C3)

In the first year of applying IFRS S2, entities are not required to provide comparative information for the preceding period. This means:

• Year 1 report: only current-year data required
• Year 2 report: comparative prior-year data required

The Basis for Conclusions (BC165 to BC167) notes that this relief is consistent with standard IFRS first-adoption practice and acknowledges that many entities will not have prior-year climate data in the required format.

Relief 2: GHG Measurement Method (C4(a))

In the first year, entities that were previously using a measurement method other than the GHG Protocol Corporate Standard may continue using their existing method rather than immediately converting to the GHG Protocol.

This accommodates entities that had already invested in alternative climate reporting systems (for example, a company that was using a national standard or industry-specific methodology). Over time, the expectation is that all entities will migrate to the GHG Protocol basis.

Relief 3: Scope 3 Deferral (C4(b))

In the first year, entities are not required to disclose Scope 3 GHG emissions (including financed emissions for financial institutions).

This is the most significant transition relief and was one of the most discussed in the development of the standard (BC168 to BC177). The rationale:

• Scope 3 measurement requires data from suppliers, customers, and value chain partners that entities typically do not have immediate access to
• Building Scope 3 measurement systems takes time. The relief provides 12+ months to develop those systems.
• The ISSB was consistent with other major standards (US SEC climate rules, Aotearoa New Zealand Climate Standards) in providing this relief

Consequence of using the Scope 3 deferral: In year 2, Scope 3 must be disclosed. If the entity provides year 2 comparative data, it may present year 1 data using the method it was using at the time (including non-GHG Protocol methods) without restating.

Transition for the 2025 Amendments (C6)

For entities that had previously applied IFRS S2 and are now applying the 2025 amendments for the first time:

When presenting comparative information for the preceding period, entities should (unless impracticable) adjust that comparative information to reflect:

• (a) Changes in GHG measurement methodology resulting from the amendments
• (b) Category 15 total and financed emissions subtotal presentation (Category 15 is the GHG Protocol's classification for indirect emissions from an entity's investments)
• (c) Industry classification system changes for financed emissions disaggregation

If adjusting comparative information is impracticable, the entity should disclose that fact. "Impracticable" is a high threshold under IFRS. It generally means the entity cannot comply even after making every reasonable effort, typically because the data simply does not exist or the cost of reconstruction would be wholly disproportionate.

The Qualified Compliance Statement Prohibition

As noted in Lesson 0.4, entities cannot make a qualified compliance statement. They cannot say "we comply with IFRS S2 except for [X]." The transition reliefs provide the escape valves for genuine first-year constraints. Outside of those reliefs, IFRS S2 compliance requires meeting all requirements (BC157 to BC164).