ESG / Climate Risk & Resilience — interpretation and safe disclosure
Climate-related disclosures under IFRS focus on how climate risks and uncertainties may affect an organisation’s strategy, performance, and financial position over time.
Under IFRS S2, climate scenario analysis is a required disclosure.
Under IFRS S1, the use of scenarios is more contextual and relevance-driven.
In both cases, disclosure risk does not arise from whether scenarios are used, but from how ESG / Climate risks and resilience strategies are described once disclosed.
Climate disclosures are read by audiences who were not involved in their preparation and are revisited over multiple reporting cycles. Language that appears reasonable at publication can later be interpreted as a signal of intent, capability, or commitment.
Why ESG / Climate risk and resilience disclosures create exposure
In practice, disclosure risk around ESG / Climate risks and resilience rarely comes from poor analysis. It comes from how uncertainty is translated into public statements.
Common sources of exposure include:
-
resilience language that reads as assurance rather than assessment
-
scenario descriptions that imply preferred pathways or decisions
-
transition-related statements that appear more settled than they are internally
-
risk narratives that are not clearly aligned with governance and decision status
Once published, these disclosures are often scrutinised during:
-
board or audit committee review
-
investor or lender engagement
-
buyer or group-level ESG assessments
At that stage, the question shifts from how risks were analysed to what the organisation appeared to claim.
Uncertainty must remain visible in disclosure
ESG / Climate risk and resilience assessments exist to explore uncertainty, not to remove it. Safe disclosure requires that uncertainty remains visible in the language itself.
In practice, this means recognising that:
-
scenario outcomes are illustrative, not predictive
-
resilience assessments do not imply guaranteed performance
-
internal analysis does not automatically justify public disclosure
-
confident language should not replace unresolved uncertainty
When uncertainty is smoothed out in disclosures, ESG / Climate risk and resilience statements can quickly be read as commitments rather than assessments.
From climate analysis to safe disclosure
ESG / Climate risk and resilience disclosures are compared year-on-year and interpreted in light of subsequent decisions and outcomes.
Language that appears balanced at the time of publication may later be read as:
-
an implied transition plan
-
a statement of strategic direction
-
a claim about preparedness or capability
Safe disclosure depends less on the sophistication of climate analysis and more on:
-
how clearly assumptions and limitations are stated
-
whether resilience language reflects actual decision status
-
how disclosures align with governance, oversight, and accountability
-
where boundaries are drawn between assessment and commitment
This is where many organisations unintentionally create exposure — not through action or inaction, but through how ESG / Climate risk and resilience are framed in disclosure.
How SuSciCo supports risk and resilience interpretation
SuSciCo supports organisations in interpreting ESG / Climate risk and resilience disclosures in context, helping ensure that what is published reflects uncertainty accurately and does not imply decisions that have not been made.
This typically involves working with management teams to:
-
clarify how risks and resilience should be described publicly
-
distinguish assessment from intent or commitment
-
align climate disclosures with governance structures and decision-making reality
-
ensure language is proportionate, cautious, and defensible
Where necessary, this may include targeted practical support to stabilise internal understanding or narrative alignment — solely to enable safe disclosure.
The objective is not stronger climate claims.
It is clear, restrained, and defensible climate disclosure.
Questions around ESG / Climate risk, resilience, and scenario-related language are commonly addressed during pre-publication disclosure review, where wording, assumptions, and implied commitments are tested before disclosures are finalised.
→ Disclosure Risk Review (Pre-publication).