1. Essential Sustainability-Related Disclosure Standards And Frameworks

This chapter outlines key global sustainability disclosure frameworks relevant to risk management, with IFRS S1 and IFRS S2 positioned as the emerging global baseline. It compares IFRS S1 and S2 with TCFD, ESRS and GRI, highlighting a high degree of interoperability, particularly on governance, strategy and risk management. IFRS S2 focuses specifically on climate-related risks and opportunities, while IFRS S1 provides broader sustainability coverage where financially material. The chapter emphasises that climate-related financial disclosures under the Strategy and Risk Management pillars remain the least reported, based on IFRS Foundation analysis of 3,814 companies across regions.

2. Jurisdictional Uptake On Sustainability-Related Disclosure Requirements And Disclosure Case Studies

This chapter reviews the adoption of sustainability disclosure requirements across jurisdictions, showing increasing mandatory alignment with IFRS S1 and S2. Mandatory implementation dates range from 2022 to 2027, depending on jurisdiction and entity type. Examples include Türkiye (mandatory from 2024), Singapore (2025–2026) and Switzerland (2022–2024). The chapter finds that quantified disclosures of financial effects of climate risks on financial position, performance and cash flows remain limited, echoing Financial Stability Board findings. Case studies illustrate how financial institutions and corporates integrate climate risks into strategy and risk management, using scenario analysis, stress testing and risk appetite frameworks to inform decision-making.

2.3 Disclosure Case Studies On Strategy And Risk Management TCFD Pillar And IFRS S2 Core Content

The report presents detailed case studies aligned to IFRS S2 core content. Strategy-focused examples demonstrate how entities assess financial effects of climate risks and opportunities, including impacts on assets, liabilities and cash flows. Resilience case studies show the use of climate scenario analysis across multiple emissions pathways and time horizons, commonly extending to 2050. For example, companies assess physical and transition risks under low, medium and high emissions scenarios, with divergence in impacts becoming more pronounced after 2030. Risk management case studies highlight emerging practices in identifying and managing climate-related opportunities, often integrated with broader risk, impact and dependency frameworks rather than treated separately.

3. Materiality Assessment Disclosures For Sustainability-Related Risk Management

This chapter explains financial materiality, impact materiality and double materiality, and their relevance for sustainability risk management. Materiality assessments are presented as a foundational step for prioritising sustainability-related risks and opportunities. Case studies show varied presentation approaches, including matrices and tabular formats. Financial institutions increasingly use double materiality assessments to identify over 100 potential impacts, risks and opportunities, drawing on internal financial data and external stakeholder input. The chapter highlights that disclosures combining financial and impact materiality are still at an early stage but can improve understanding of risk profiles, resilience and long-term value creation.

4. Transition Plan Disclosures

This chapter reviews key transition plan frameworks, including the Transition Plan Taskforce and GFANZ frameworks, and how they align with IFRS S2. Transition plans are identified as integral to demonstrating climate resilience and strategic viability in a low-carbon economy. Case studies show that most transition plan disclosures remain largely narrative, with limited quantified targets or financial linkage. Where more advanced, disclosures include governance arrangements, interim targets, engagement strategies and metrics. The chapter suggests that clearer alignment with decarbonisation pathways and scenario-informed targets enhances credibility and decision-usefulness.

5. Practical Challenges In Sustainability-Related Disclosures And Needs For Capacity-Building

The report identifies persistent challenges, including inconsistent data, lack of standardised methodologies and difficulties quantifying impacts, risks and opportunities. Data quality issues undermine confidence and contribute to concerns about greenwashing, particularly in ESG ratings. The chapter notes size-related biases in ESG assessments and highlights cases where flawed models produce implausible estimates. It emphasises the need for capacity-building, clearer guidance and transparency on assumptions, limitations and data constraints to improve disclosure quality.

Conclusion

The report concludes that sustainability-related disclosures are critical for effective risk management and strategic planning but remain uneven in practice. Disclosure gaps, particularly on quantified financial effects and transition plans, limit decision-usefulness. The report argues that illustrative case studies, stronger interoperability between standards and targeted capacity-building can support more credible, consistent and risk-relevant sustainability disclosures.