Photo: Bill Mead
The International Financial Reporting Standards (IFRS) Foundation released new transition plan guidance yesterday, advancing its regulatory agenda even as speakers at its annual conference warned of mounting pressure for deregulation in an increasingly fragmented global landscape.
At the event in London, the IFRS released comprehensive guidance on disclosures relating to transition plans, building on materials from the UK’s Transition Plan Taskforce to support implementation of IFRS S2, the climate-focused sustainability standard.
Sue Lloyd, vice-chair of the International Sustainability Standards Board, said the new guidance focuses on disclosure requirements rather than mandating corporate behavior. The guidance is “focused on disclosures … It is not requiring companies to have a transition plan. That is not our job … It’s telling you what information to provide about the plans that you have decided to have to meet the needs of investors,“ she said.
The document “addresses the fragmentation of disclosures about transition plans – which is costly for both preparers of information and investors – and provides inspiration for entities applying IFRS S2,” according to an IFRS statement.
Andrew Barckow, chair of the International Accounting Standards Board (IASB) who also spoke at the event, cautioned that regulators should not “lean back and let go” despite growing political pressures threatening financial reporting consistency.
“We can observe growing signs of fragmentation in the global economy,” Barckow said. “Geopolitical tensions are reshaping longstanding partnerships. Protectionist policies are influencing trade relationships, and supply chains are being redrawn in response to shifting priorities and risks”.
While the system so far has “remained robust”, he argued that “any weakening of enforcement mechanisms could pose significant risks, not just in terms of global financial stability, but also to the consistency and credibility in financial reporting”.
As well as transition plan guidance, the IFRS highlighted several other significant developments.
The ISSB announced publication of a comprehensive exposure draft aimed at enhancing sector-specific guidance from the Sustainability Accounting Standards Board (SASB). These covers nine priority industries including the oil, gas and mining sectors, with targeted amendments to 41 other sectors.
The IFRS also revealed research plans for biodiversity, ecosystems and ecosystem services and human capital reporting. Lloyd indicated preliminary research suggests there is investor need for standards in these areas, though cautioned that the IFRS will “not be coming out with big new standards, requiring lots of new disclosures in a rush, but rather a more proportionate approach, perhaps looking at the SASB standards as a form of enhancement and building from there”.
Despite ambitious plans, there was commitment to proportionality in reporting. The IASB’s Barckow highlighted the recent release of a reduced disclosure regime for eligible subsidiaries as an example of how the IFRS is striking this balance.
“We cannot prevent fragmentation. That lies beyond the power of any single organisation,” Barckow said. “But what we can do is provide and maintain high-quality global standards, support consistent application and work constructively with our stakeholders to sustain confidence in the system” .
This page was last updated June 26, 2025
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
