ISSB Implementation Insights podcast Q2 2026

Thank you, Sarah.

Uh, yeah, so the first topic is on our education materials and, and wanted to highlight our most recently published, uh, education material, which is a webcast and an accompanying fact sheet on the topic of climate resilience and climate-related scenario analysis requirements in IFRS S2.

And the focus of this webcast is on a, a, you know, a commonly flagged challenging area in IFRS S2, um, which is, you know, about scenario analysis.

But the core message is that, you know, IFRS S2 requires entities to disclose information that enables investors to understand the resilience of its strategy and business model to climate-related changes, developments, and uncertainties, um, that is, its climate resilience.

And so we wanted to make it clear that, like, the requirements about scenario analysis are all in the context of disclosing information about climate resilience because S2 requires a company to use scenario analysis to inform the assessment of climate resilience.

And the purpose of those disclosures is to help investors understand the implications of the assessment on its strategy and business model, including the entity's capacity to adjust or adapt to the effects identified through the assessment.

One thing that we really wanted to emphasize in the resources is that a company is able to select a proportionate approach to its scenario analysis that's commensurate with its circumstances.

So this means that the approach to scenario analysis considers the company's exposure to climate-related risk and opportunities, as well as the skills, capabilities, and resources that are available to the company.

IFRS S2 does not prescribe a specific methodology or require a, uh, require the use of a particular number or set of scenarios.

It just requires that the approach that the company uses for scenario analysis be commensurate with its circumstances and enable it to consider all reasonable and supportable information available to it without undue cost and effort.

So this means that a, you know, a qualitative approach, a, a quantitative approach, or a combination of approaches can all be appropriate under S2.

So a company with a lower exposure to climate-related risk and opportunities and/or lower skills, capabilities, and resources might initially apply a, a simpler, more qualitative or qualitative-only approach, and then over time evolve to a more advanced approach as it, uh, increases its, its skills, capabilities, and resources.

The webcast includes a couple, uh, helpful illustrative examples demonstrating how two very different companies, one large energy company and a mid-size consumer goods company, might arrive at quite different but equally valid approaches to scenario analysis.

So what this means is that, you know, companies applying very different approaches to scenario analysis can still meet the requirements of S2.

Yeah.

I, I think that's a really good webcast for people to look at because I think it does a good job of reinforcing that there's no sort of one-size-fits-all requirement in S2.

It really is designed so that it's possible for entities of all sorts of sizes from s- different sectors and different geographies around the world to be able to, uh, apply the standard.

So it means that smaller entities or those that are earlier in, um, implementing, um, you know, uh, climate reporting and, and learning about the scenario analysis don't need to replicate the sophistication that a larger financial institution, for example, might undertake when it comes to, to modeling scenarios and thinking about their resilience.

And what, what I hope the message in that, uh, webcast is, is that it really is okay for those with, uh, those entities with more limited experience and resourcing to do something simpler.

But there's also the opportunity to im- improve over time, and that's what we really sought to achieve, uh, with the approach in IFRS S2, to make it possible for everybody to get started and learn by doing, seems to be a, a popular phrase that people use these days.

And I think the key question to keep coming back to for those who are looking at these requirements and thinking about, okay, what should I do and, and, and what approach is going to be appropriate is, does the approach that I take result in investors getting useful information about the resilience of the strategy and the resilience of my, uh, business model to climate-related risks and opportunities? And ultimately, am I giving them confidence that those in the organization responsible for looking after the strategy and the direction of the business are asking the right questions and thinking about the right things to enable them to manage risks and to run the business well, given what it's exposed to? That's what this is all about.

So I really hope that people find the, uh, webcast and the slides and the accompanying fact sheet are useful.

I think they're a great starting point, um, even just looking at the fact sheet if you don't have time to watch the recorded webcast.

Uh, but I really do encourage everybody, preparers, auditors, advisors, uh, to watch the, the full webcast when you can because I think there's a lot of really practical information there.

there.Thanks, Sue.