With many regions adopting IFRS S2 for climate risk and resiliency reporting, it makes sense for commercial real estate owners and operators to integrate IFRS S2 requirements into financial reporting.
Like LEED v5, GRESB, and BREEAM, IFRS S2 requires an entity to disclose information about climate-related risks and opportunities that could “reasonably be expected to affect the entity’s cash flows, its access to finance or cost of capital over the short, medium or long term.” [source]
Automating the assessment and documentation needed for meeting IFRS S2 standards can both simplify compliance and enhance a building’s overall performance.
Understanding IFRS S2 Requirements
IFRS S2 requires companies to share information about climate issues in their financial reports to help investors understand how the company is handling climate-related challenges and opportunities. There are four core disclosure requirements:
- Governance: Outline the processes, controls, and procedures for monitoring and managing climate-related risks.
- Strategy: Confirm the approach for managing climate-related risks and opportunities.
- Risk Management: Outline the processes for identifying, assessing, prioritizing, and monitoring climate risks.
- Metrics and Targets: Identify performance indicators and detail progress made toward climate-related targets.
Three Core Resilience Questions
Like other standards addressing climate risk and resiliency, IFRS S2 requires the same three core resilience questions to be addressed
- What are the climate risks at this location?
- What is the financial impact on my building?
- What should be done to address this risk?
How ClimateFirst Automates Compliance
ClimateFirst reports provide comprehensive answers to these resilience questions that also satisfy IFRS S2 requirements. While supporting all four of the disclosure requirements, the reports are especially helpful in achieving the Risk Management requirements:
- ClimateFirst Risk Exposure Screens evaluate the likelihood and severity of hazards using advanced climate modeling.
- ClimateFirst Climate Value at Risk (CVaR) Assessments quantify the financial impact of climate hazards on your building.
- Resiliency Plans turn the insights gained from the screen and CVaR assessments into actionable recommendations.
Beyond Compliance: Strategic Benefits
Whether meeting IFRS S2 standards is an immediate goal or not, minimizing exposure to climate risks will strengthen an entity’s long-term adaptability and value. When ClimateFirst reports are integrated into your operation systems, you gain a competitive edge. Automated risk analysis translates climate impacts into financial terms, creating forward-looking resilience strategies and enhancing overall building value and efficiency. Meet IFRS S2 requirements, while also reducing risk and increasing long-term resiliency.
Ready to streamline IFRS S2 reporting? Reach out or request a sample report.
