IFRS S2 requires an entity to disclose information about its climate-related risks and opportunities. Entities might identify climate-related risks and opportunities at the nexus of climate and nature (for example, those related to water or deforestation), as well as those closely associated with socioeconomic aspects, such as the just transition to a lower-carbon economy. Stakeholders have asked whether—and, if so, how—entities should consider such ‘nature and social aspects’ of climate-related risks and opportunities when they apply the requirements in IFRS S2 to prepare their climate-related disclosures.

This educational material, which comprises three examples, explains and illustrates how entities might apply requirements in IFRS S2 and IFRS S1 in such circumstances to provide material information to users of general purpose financial reports. The examples focus on particular requirements and therefore are not intended to explain or illustrate how the entity would apply all of the core content requirements in IFRS S2 and IFRS S1, even as they relate to the risks and opportunities discussed.