Disclosure focus
This disclosure asks an organisation to explain the processes and policies it uses to identify, assess and manage climate-related risks. In practice, the report should show how climate risk is built into decision-making, what internal rules or procedures are in place, and who is responsible for applying them. The emphasis is on describing the organisation’s approach clearly, rather than listing isolated actions.
The practical focus is usually on whether these processes and policies apply across the whole organisation, including relevant operations, business units and locations, rather than only at a few flagship sites. A useful explanation would make clear the scope of coverage, any differences between parts of the business, and how consistently the approach is applied in day-to-day management.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official IFRS source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key information to prepare
＋ Show s2-25-a sub-elements (LRA working checklist)
Explain any year-on-year changes in the figures or information you report.
State where the data comes from and what boundary or coverage it includes.
Set out how often you review or track the matter.
Describe the policies or procedures you use to manage it.
Show the basis you use to decide what gets attention first.
Set the criteria or cut-offs you apply to judge risk.
If you use scenarios to spot risks, explain how they feed into that assessment.
How to prepare it
1Set the boundary first: decide which parts of the business, value chain, or reporting period are in scope for this disclosure, and make that choice clear in your working papers.
2Define the terms you will use for the report: explain what counts as a relevant source of information, what sits inside the scope, and how you will treat any screening, ranking, or scenario-based inputs used to identify risks.
3Gather the support behind each point: keep the underlying records that show the information came from the chosen sources, the monitoring rhythm used, and the policies or procedures that guide the process.
4Build the disclosure from those records: prepare the figures or narrative so it reflects the way risks were identified, the criteria or cut-offs applied, and the logic used to decide what was prioritised.
5Record anything that changed or was left out: note differences from the previous year, explain exclusions, and describe any shifts in sources, scope, methods, or assumptions so the reader can follow the trail.
6Check the draft against the official source before sign-off: confirm the wording, scope, and evidence line up with the standard and that nothing material has been missed or overstated.
Request the data
Request the climate-risk process evidence from Risk
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
How do we currently identify, assess, prioritise, monitor, and update climate-related risks, and what changed since last year?
Use your organisation’s own names for risk frameworks, control cycles, review forums, and scenario work first; then map them to the disclosure fields below. Keep the ask in business language that your risk team already uses, and check the official source before sign-off.
Weak request
Please provide the climate-risk policies and processes disclosure evidence.
Why it fails: This uses framework language only, so the owner may not know which internal documents, systems, or review cycles to pull. It also does not specify scope, period, source, or the exact business questions needed to assemble the evidence.
Better request
Please send the latest pack your team uses to identify, rank, and review climate-related risks for [reporting period], including the documents, register extracts, committee papers, and scenario notes that show the scope covered, review cadence, ranking logic, thresholds or triggers, and what changed since last year.
Industry examples
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Set out the basis used to prepare the disclosure, including the definitions applied, the data inputs relied on, the scope covered and the review rhythm used to keep the information current.
Context note
Explain what the figures are intended to show in practice: how the organisation identifies climate-related risk, what drives the ranking of issues, and how the chosen thresholds and scenario work shape the results.
Fluctuation statement
If there are notable year-on-year movements, describe whether they come from changes in the underlying data, the scope of what was included, the way risks were assessed, or the timing of the review process.
Content index entry
s2-25-a Climate-risk processes and policies — [location / page] / [notes]
Download Centre
Preparation tools & forms
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
The request goes to the wrong team, so the answer comes from a group that does not actually run the climate-risk process or keep the supporting records.
Framework language used
People ask for the information in reporting jargon instead of the organisation’s own terms, and the source team cannot map it back to the way they work.
Scope not pinned down
The collector does not state which business areas, entities or activities are in scope, so different teams send data for different populations.
Timing basis mixed up
The team pulls information from the wrong period or uses a different cut-off date from the one used elsewhere, which makes the set inconsistent.
Counting basis blended
Inputs are combined even though they were built on different counting methods, so the final figure no longer matches any source record.
Source labels lost
Original file names, system tags or local labels are stripped away during collection, making it hard to trace each item back to where it came from.
Separate groups merged
Data for distinct populations is rolled together when it should stay separate, which hides differences in how the process works across the organisation.
Evidence details missing
The collector saves the answer but not the supporting metadata, so later reviewers cannot see when it was captured, by whom, or from which source.
No approval trail
The draft is passed on without a clear sign-off record, so nobody can show who checked the inputs before they were used.
Where judgement is often needed
How to handle a year of portfolio reshaping
If acquisitions, disposals or other boundary moves changed the business mix during the year, explain the cut-off date and whether you restated or left prior-period figures as reported.
Which country rule set to use where local practice differs
Where the same control or threshold is defined differently across jurisdictions, state the rule set you applied, why it was chosen, and whether any local variations were kept separate.
Where to draw the line for near-boundary activities
For activities, sites or teams that sit close to the reporting perimeter, set out the inclusion rule you used and disclose any borderline cases that were included or left out.
Whether the process is described on a current or average basis
If the approach changed during the year, say whether you described the position at the reporting date or used an average view, and explain the basis for that choice.
When to use estimates instead of direct records
If complete operational records were not available, identify the parts built from estimates, the source data behind them, and the main assumptions used.
How much detail to show after rounding
If figures or counts were rounded, make clear the rounding convention and ensure the narrative still matches the underlying totals and sub-totals.
How to aggregate sensitive location or people data
Where privacy, security or confidentiality limits the level of detail, group the information at a higher level and explain the aggregation rule so the scope remains understandable.
How to treat a control that is partly outsourced
If monitoring, review or escalation sits partly with a third party, describe which parts remain in-house, which are outsourced, and how you decided they belong in the process description.
Whether scenario work is used for every risk or only selected ones
If scenario analysis is applied only to certain climate risks, state the selection rule and explain how that links to your prioritisation and threshold setting.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Electricity utility
*Illustrative only: synthetic example.* We refreshed our climate-risk screening this year after adding two new grid-resilience data feeds, so the set of sites under review rose from 18 to 20 and the share of assets covered moved from 82% to 91%.
- Our checks draw on internal asset registers, outage logs and maintenance records, plus external weather and flood datasets; we review them monthly, with a deeper refresh each quarter.
- We rank issues by likely financial effect, safety exposure and service disruption, and we only escalate items that score 4 or 5 on our five-point scale or that affect more than 10% of a region’s load.
- For identifying risks, we test a 1.5°C orderly transition case and a 3°C physical-risk case; the first is used to spot policy and market shifts, while the second helps us flag assets with repeated flood or heat stress.
This example shows how a reporter can explain what changed since last year, where the information comes from, how often it is checked, how the process works, what gets priority, the trigger levels used, and how different future-path assumptions feed into risk spotting.
Illustrative (synthetic) example — Food manufacturing
*Illustrative only: synthetic example.* We widened our supplier and factory review this year, moving from 120 to 135 monitored locations and increasing coverage from 76% to 84% of our direct spend.
- The review uses procurement records, supplier questionnaires, incident reports and water-stress maps; we update the core dataset every month and re-run the full assessment twice a year.
- Our process gives first attention to sites with repeated permit breaches, high water use or exposure to heat-related downtime, and we escalate any location that has three or more incidents in 12 months or sits above our 70th-percentile water-risk score.
- To find emerging issues, we test a short-term disruption case and a longer-term scarcity case; the first highlights logistics and labour pressure, while the second helps us identify suppliers likely to face chronic water constraints.
This example demonstrates a narrative disclosure that covers year-on-year movement, the information base and boundary, review frequency, the way the assessment is run, how priorities are set, the thresholds that trigger escalation, and the use of scenario analysis in spotting risk.
How companies report S2-25-a in practice
Examples of full and partial reporting practice. These are evidence-led reviews, not exact disclosure templates to copy.
SITC International Holdings Company Limited
Water Transportation · Hong Kong · 2025
SITC International Holdings Company Limited’s 2025 Environmental, Social and Governance Report provides evidence on the data sources and scope used in its sustainability processes, as detailed on page 190. The report also outlines the policies and processes for identifying, assessing, prioritising, and monitoring sustainability-related risks on the same page, and discusses the use of climate-related scenarios in risk identification on page 195. However, the report does not provide information on changes from the prior year, monitoring cadence, prioritisation logic, or risk criteria thresholds.
Yum China Holdings, Inc.
Hotels, Restaurants, Leisure, Tourism Services · China · 2025
Yum China Holdings, Inc.'s 2025 Sustainability Report provides evidence of policies and processes used to identify, assess, prioritise, and monitor climate-related risks on page 48, as well as the use of climate-related scenario analysis to inform risk identification on the same page. However, the report offers only unclear disclosures regarding data sources and scope (p.48), monitoring cadence (p.47), prioritisation logic (p.47), and risk criteria thresholds (p.47). Additionally, there is no found evidence about changes from the prior year.
CJ Cheiljedang Corporation
Food Production — Agricultural · South Korea · 2024
CJ Cheiljedang Corporation’s Sustainability Report 2024 shows that climate-related factors are considered in key company management decisions, with a committee evaluating these issues (p.16). The company conducted a scenario analysis of climate-related physical risks for major manufacturing sites and raw material sources (p.26), and climate-related risks are incorporated into the company-wide risk management framework, with ongoing monitoring and structured response measures (pp.30-31). However, the report does not provide information on changes from the prior year, data sources and scope, monitoring cadence, prioritisation logic, or risk criteria thresholds.
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Scenarios to work through
A group updates its climate-risk playbook after a severe weather season. The risk team has new supplier data, a revised review timetable, and a changed way of ranking issues, but the draft note only says the process was refreshed.
QWhat should the preparer do so the disclosure is useful to readers comparing this year with last year?
Reveal model answer →Hide answer ↑The note should spell out what changed from the previous year in the way the organisation handles climate-risk work, rather than using a vague statement that the process was refreshed. It should make clear which parts of the approach were altered, so readers can see the movement over time.
Why this matters · Readers need a clear description of year-on-year movement in the climate-risk approach, not a generic update label.
A finance team wants to describe climate-risk controls using only the central register, because that is the easiest source to pull from. However, the sustainability team also uses site-level logs, board papers and a supplier-screening tool, and those sources cover different parts of the business.
QHow should the preparer decide what to include about the information base and the part of the business covered?
Reveal model answer →Hide answer ↑The disclosure should explain which information feeds the process and what part of the organisation those inputs cover. If more than one source is used, the preparer should describe the main ones and the scope they cover, so the reader understands the basis for the climate-risk work.
Why this matters · The explanation should show both the information base and the coverage of that base.
A company reviews climate-risk indicators every month, but only escalates them to senior leaders once a quarter unless a trigger is hit. The draft disclosure says the issue is monitored regularly, without saying how often or what happens between reviews.
QWhat level of detail should the preparer give about the review pattern?
Reveal model answer →Hide answer ↑The preparer should state the review rhythm in plain terms, including how often the issue is checked and whether there are different steps for routine review and escalation. A reader should be able to tell how the monitoring works in practice, not just that it happens.
Why this matters · The cadence of review should be understandable from the disclosure, including any different timing for routine and escalated checks.
A risk committee uses a scoring model to decide which climate threats get attention first. The model gives extra weight to operational disruption and legal exposure, and anything above a set score goes into the top tier, but the draft only says the committee prioritises material matters.
QWhat should the preparer explain about the way climate risks are sorted and filtered?
Reveal model answer →Hide answer ↑The disclosure should describe the logic used to rank and filter climate risks, including the main factors and any cut-offs or thresholds that move an item into a higher priority group. That lets readers see how the organisation decides what gets attention first.
Why this matters · The prioritisation method should be transparent enough for a reader to understand the ranking rules and any trigger points.
Framework references
Relevant IFRS / ISSB requirements and related disclosures
Available framework references and nearby disclosures relevant to preparing this requirement.
Primary
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FAQ
Questions this page answers
How do I use the s2-25-a page to draft the disclosure from scratch?+−
Start with the plain-language explainer and the step-by-step ‘how to prepare’ section, then use the draft-output section to turn your data into a narrative and content-index line. The page is designed as practitioner guidance, so it helps you move from preparation to a first draft rather than treating it as a formal source.
What data do I need to gather for s2-25-a before I start writing the disclosure?+−
The page says to prepare year-on-year changes, source systems and boundary, review frequency, relevant controls and rules, selection and ranking logic, risk cut-offs, and how scenario analysis is used. Use that list as your data request to owners so you can build the disclosure and the evidence pack together.
How should I decide the boundary and source systems for s2-25-a?+−
The page tells you to capture source systems and boundary as part of the preparation data points, so the practical step is to document where the data comes from and what is included before drafting. That makes it easier to explain the scope consistently and support assurance later.
Who should own the inputs for s2-25-a in practice?+−
The page does not assign roles, but it does point you to the data points and the step-by-step preparation process, which you can use to split ownership across ESG, HR, finance, operations, or data owners as relevant to your organisation. The key is to make sure each input has a named owner before you build the draft.
What should go into the evidence pack for s2-25-a assurance?+−
The page includes an evidence pack with five items for assurance readiness, so you should use that as the core folder for supporting documents. Pair it with the six assurance claims to verify so each claim has a clear link to a risk and evidence.
What are the six assurance claims on the s2-25-a page and how do I use them?+−
The page says there are six assurance claims to verify, each framed around claim, risk, and evidence. In practice, use them as a checklist to test whether your draft is supported and whether the evidence pack covers the main risks.
What are the common mistakes people make when reporting s2-25-a?+−
The page lists common reporting gaps and mistakes, so it is useful as a pre-submission check rather than a theory page. Review those gaps after drafting to catch missing boundary detail, weak methodology, or unsupported claims before assurance.
How do I use the workbook download for s2-25-a?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format, which is there to help you organise the preparation and assurance steps. Use it alongside the page’s data points, evidence pack, and draft-output section to move from raw inputs to a reviewable draft.
What is the printable Library Card PDF for s2-25-a for?+−
The page offers a printable Library Card in PDF format, which is useful if you want a quick reference during data collection, drafting, or assurance review. It sits alongside the workbook and the page content as a practical support tool.
Can I use the synthetic example on the s2-25-a page as a template for my own disclosure?+−
Yes, but only as a synthetic illustration: the page includes example disclosures and a quantitative table to show how a draft might look. Treat it as a formatting and logic guide, not as a model to copy without replacing it with your own data and boundary.
How does the ESRS E1 correspondence help me with s2-25-a if I already report under ESRS?+−
The page says the closest ESRS correspondence is ESRS E1 (Climate Change), so you can use that as a pointer to where related data may already exist. The page does not say the requirements are identical, so treat it as a reuse opportunity for data and evidence, not a one-to-one mapping.
More questions this page can help with
s2-25-a disclosure checklist for sustainability managers2-25-a data points boundary source systems review frequency controls ruleshow to build evidence pack for s2-25-a assurance readinesss2-25-a common reporting gaps mistakes to avoids2-25-a workbook download prep and assurance xlsxs2-25-a library card pdf printable downloads2-25-a draft narrative starters and content index lines2-25-a synthetic example disclosure tables2-25-a year on year changes how to presents2-25-a scenario analysis use in disclosures2-25-a selection and ranking logic risk cut-offss2-25-a ESRS E1 data reuse climate change
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