ACMF-ISSB Technical Training on

Transitioning from TCFD to ISSB: Gap

Analysis

20 May 2024

The views expressed in this presentation are those of the presenter, not necessarily those of the IFRS
Foundation, International Accounting Standards Board or the International Sustainability Standards Board.
Copyright © 2024 IFRS Foundation. All rights reserved.
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Objectives

• Why - Understand the purpose of

transitioning from TCFD to ISSB
• What – Identify the differences between
TCFD Recommendations and ISSB
Standards
• How – Develop sustainability disclosure
plan
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Overview

1. Introduction on TCFD and ISSB

2. Comparison – IFRS S2 and TCFD Recommendations

3. Get started with the transition

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‘Culmination’ of TCFD work

ISSB Standards mark “the culmination of the work of the Task Force on
Climate-related Financial Disclosures”

IFRS S1 and IFRS S2 incorporate the recommendations of the TCFD (mapping

available at ifrs.org)

Provided yet further clarification of ‘alphabet soup’

Companies and jurisdictions still able to use TCFD Recommendations

Financial Stability Board transferred TCFD monitoring responsibilities to ISSB

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ISSB Standards apply TCFD structure to set out core content

areas

Governance Strategy Risk management Metrics and targets

Governance processes, A company’s strategy for The process A company's performance
controls and managing sustainability- a company uses in relation to sustainability-
procedures a company related risks and to identify, related risks
uses to monitor, manage opportunities assess, prioritise and and opportunities
and oversee monitor sustainability-
sustainability-related related risks and
risks and opportunities opportunities

TCFD Recommendations
Governance
Disclose the organisation’s
governance around
climate-related risks and
opportunities.
a) Describe the board’s
oversight of climate-related
risks and opportunities.
b) Describe management’s
role in assessing and
managing risks and
opportunities.
Strategy
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the organisation’s
businesses, strategy, and financial
planning where such information is
material.
a) Describe the climate-related risks
and opportunities the organisation has
identified over the short, medium, and
long term.
b) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy,
and financial planning.
c) Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
Risk Management
Disclose how the organisation
identifies, assesses, and
manages climate-related risks.
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks.
b) Describe the organisation’s
processes for managing
climate-related risks.
c) Describe how processes for
identifying, assessing, and
managing climate-related risks
are integrated into the
organisation’s overall risk
management.
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Metrics and Targets
Disclose the metrics and targets used
to assess and manage relevant
climate-related risks and opportunities
where such information is material.
a) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and
performance against targets.
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Comparison: IFRS S2 Climate-related Disclosures

with the TCFD Recommendations
Differences take three forms. Specifically, IFRS S2:

• uses different wording to capture the same

information as the TCFD recommendations

• requires more detailed information that is in line

with the TCFD recommendations

• differs from the TCFD guidance-mainly by

providing some additional requirements and
guidance.

ifrs.org/content/dam/ifrs/supporting-implementation/ifrs-s2/ifrs-s2-comparison-tcfd-july2023.pdf
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IFRS S2 based on TCFD recommendations

TCFD core elements IFRS S2 summary comparison

Governance Broadly consistent

• Requires that a company consider and refer to its Industry-

based Guidance
Broadly
Strategy • Requires additional information regarding resiliency
consistent
• Does not specify which climate-related scenarios to use
• Provides additional application guidance and reliefs

Broadly • Explicitly requires additional disclosures on the processes used

Risk management
consistent to identify, assess, prioritise and monitor opportunities
• Requires disclosure of industry-based metrics
Broadly • Requires additional disclosures related to a company’s GHG
Metrics and targets
consistent emissions and planned use of carbon credits
• Provides additional application guidance and reliefs
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ISSB Standards recognise

the value of industry-
specific disclosures
• IFRS S1 requires companies to refer to
and consider the applicability of the
industry SASB Standards for topics
beyond climate to identify sustainability
risks or opportunities and disclosures
• IFRS S2 requires industry-specific climate-
related disclosures and provides
illustrative guidance derived from SASB
Standards to support that.
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Get Started
Read and Explore:
IFRS S1 and IFRS S2

Use:
the IFRS S2–TCFD comparison table

Take Action:
to fill any gaps identified between your current climate-
related disclosures and IFRS S2’s requirements
Assess:
Compliance with IFRS S1 and IFRS S2?
Change the timing of disclosures?
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Annex: Comparision table

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