ISSB transition reliefs

Most companies applying the ISSB standards for the first time do not have every system in place on day one, and the ISSB designed its standards with that in mind. The transition reliefs decide what a first report must contain and when it must be published, so they shape implementation plans and assurance. This guide sets out each relief in IFRS S1 and IFRS S2, works through a company's first three years, and covers how jurisdictions have extended or limited the reliefs and the proportionality mechanisms that continue after the transition.

By Mirza Fahad Baig, Chartered Accountant. Reviewed by Hamza Fida, Chartered Accountant. 4 minute read.

Short answer

The ISSB transition reliefs make the first years of IFRS S1 and IFRS S2 easier. In its first annual reporting period, a company may report on climate-related risks and opportunities only, applying IFRS S1 just as far as it relates to climate; it need not give comparative information; it may publish its sustainability disclosures after its financial statements, with its next half-year interim report, or within nine months of the year end if it does not publish one; it need not disclose scope 3 emissions, including financed emissions; and it may keep using a greenhouse gas measurement method other than the GHG Protocol if it used one before. In the second year, a company that reported on climate only need not give comparatives for other topics, and one that used the scope 3 relief need not give scope 3 comparatives. Many jurisdictions add their own reliefs, such as longer climate-only periods or later scope 3.

At a glance

Climate first
Climate only in year one
Comparatives
None in year one
Timing
With next interim report
Scope 3
Not in year one
GHG method
Old method allowed
Local rules
Often add more relief
ISSB transition reliefsClimate first: Climate only in year one; Comparatives: None in year one; Timing: With next interim report; Scope 3: Not in year one; GHG method: Old method allowed; Local rules: Often add more relief.KEY FACTS AT A GLANCEISSB transition reliefsClimate firstClimate only in year oneComparativesNone in year oneTimingWith next interim reportScope 3Not in year oneGHG methodOld method allowedLocal rulesOften add more reliefTax BakersISSB transition reliefsClimate first: Climate only in year one; Comparatives: None in year one; Timing: With next interim report; Scope 3: Not in year one; GHG method: Old method allowed; Local rules: Often add more relief.KEY FACTS AT A GLANCEISSB transition reliefsClimate firstClimate only in year oneComparativesNone in year oneTimingWith next interim reportScope 3Not in year oneGHG methodOld method allowedLocal rulesOften add more reliefTax Bakers
Key facts at a glance, as set out in this guide.

What transition reliefs do IFRS S1 and S2 give?

IFRS S1 provides three reliefs for the first annual reporting period in which a company applies the standards:

  • Comparative information: not required in the first year.
  • Timing: the first sustainability disclosures may be published after the financial statements: with the next second-quarter or half-year interim report if the company must publish one, and otherwise within nine months of the year end.
  • Climate first: the company may report only on climate-related risks and opportunities under IFRS S2, applying IFRS S1 only as it relates to climate. If it does, it need not give comparatives for other topics in its second year.

IFRS S2 adds two reliefs for the first year: the company need not disclose scope 3 emissions, including financed emissions, and it may continue to use a measurement method other than the GHG Protocol if it used that method in the year before. See IFRS S1 and IFRS S2.

ISSB transition reliefs: a company's first three years

A listed company in a jurisdiction that has adopted IFRS S1 and IFRS S2 without extra reliefs applies them from 1 January 2026 and uses every relief available.

A company's first three years under IFRS S1 and S2A company's first three years under IFRS S1 and S2Year 1: 2026Year 2: 2027Year 3: 2028TopicsClimate onlyAll materialtopicsAll materialtopicsComparativesNoneClimate onlyAll topicsScope 3Not requiredRequired, nocomparativesRequired withcomparativesGHG methodExisting methodallowedGHG ProtocolGHG ProtocolTimingWith half-yearreport, 2027With theaccountsWith theaccounts
Each relief lasts one year, with a second-year carry-over for comparatives.

In 2026, its first report covers climate only, has no comparatives, omits scope 3 and measures scope 1 and 2 with the national method it used before; it is published with the half-year report in 2027. In 2027, it must report on all material sustainability-related risks and opportunities, publish with its financial statements, measure under the GHG Protocol and disclose scope 3, but it need not give comparatives for non-climate topics or for scope 3. By 2028, everything applies in full, including comparatives for every topic. The December 2025 amendments to IFRS S2, effective from 2027, apply alongside. See the December 2025 IFRS S2 amendments.

How have jurisdictions changed the reliefs?

Many jurisdictions extend the reliefs or add their own. The UK's rules for listed companies let them report on climate only for two years and defer scope 3 for one. Malaysia extends the reliefs by one year for its first two groups of companies and by two years for the third. Japan lets companies publish their sustainability disclosures after their financial statements for two years. Australia keeps the ISSB's first-year reliefs and adds a three-year modified liability regime, which limits private legal action over statements on scope 3, scenario analysis and transition plans. Pakistan has added none, but allows first-year disclosures to be published within nine months of the year end. Companies should read the local version, not just the ISSB text. See ISSB adoption by country.

What continues after the transition?

Two proportionality mechanisms are permanent. For some requirements, such as identifying risks, measuring anticipated financial effects and scenario analysis, a company uses all reasonable and supportable information available without undue cost or effort. For others, it can take account of its skills, capabilities and resources, so a smaller company can give qualitative rather than quantitative information on financial effects or use qualitative scenarios. Neither is a transition relief, so neither expires, but both must be explained when used.

How should companies plan around the reliefs?

Use the first year to build the processes the second year needs: identify non-climate risks and opportunities under IFRS S1 while reporting climate only, start collecting scope 3 data, move to the GHG Protocol, and collect data that will serve as comparatives. Assurance often starts in the second or a later year, so controls should be in place before then. Using every relief can leave a heavy second year, so some companies choose to give more in their first report. See the 15 scope 3 categories and limited and reasonable assurance.

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Questions people ask

What are the ISSB transition reliefs?

In the first year, no comparatives, later publication, climate-only reporting, no scope 3, and continued use of an existing greenhouse gas method; in the second year, no comparatives for topics or scope 3 covered by those reliefs.

Can a company report only on climate under the ISSB standards?

Yes, in its first annual reporting period; some jurisdictions allow longer.

When must the first ISSB report be published?

With the financial statements, or under the relief with the next half-year or second-quarter interim report, or within nine months of the year end.

Is scope 3 required in the first year of IFRS S2?

No. Scope 3, including financed emissions, is not required in the first annual reporting period.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2)
  2. IFRS Foundation: jurisdictional profile, Pakistan
  3. Japan Financial Services Agency: roadmap for mandatory SSBJ standards, April 2026
  4. A&O Shearman: FCA finalises UK SRS-aligned sustainability disclosure rules for listed issuers, October 2026
  5. Allen & Gledhill: ACRA and SGX RegCo extend timelines for most climate reporting requirements, September 2025
  6. IFRS Foundation: adoption of IFRS Sustainability Disclosure Standards, World Standard-setters Conference, September 2026

Rules and fees change. If you are reading this long after October 10, 2026, confirm the figures with the source before you rely on them.

SustainabilityIFRS S1: general requirements explainedSustainabilityIFRS S2 climate-related disclosuresSustainabilityWhich countries have adopted the ISSB standards

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This guide is general information. It is not tax or legal advice for your situation.