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ACCA Strategic Professional · Advanced Financial Management · Corporate environmental, social, governance (ESG) and ethical issues

A company reports under IFRS S2 Climate-related Disclosures. Which of the following best describes the four core content areas an entity must disclose?

IFRS S2 requires disclosure under four core content areas: governance, strategy, risk management, and metrics and targets. These follow the TCFD structure and help investors understand how climate-related risks and opportunities affect the entity's prospects and cash flows.

  1. AGovernance, strategy, risk management, and metrics and targetsCorrect
  2. BGovernance, materiality, assurance, and metrics and targets
  3. CStrategy, remuneration, risk management, and carbon offsets
  4. DGovernance, compliance, strategy, and stakeholder engagement

Explanation

IFRS S1 and S2 are structured around the four pillars aligned with the TCFD: governance, strategy, risk management, and metrics and targets. The other options include items such as assurance, remuneration or offsets that are not core content areas.

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