- Paragraph 29(e) is capital deployment. IFRS S2 capital deployment reporting covers the money you put toward climate-related risks and opportunities, not just decarbonisation.
- One clause does three jobs. The same line covers physical-resilience spending, low-carbon transition spending, and opportunity spending. Many reporters disclose only the transition half.
- Required everywhere, explained nowhere. 29(e) applies to every reporter, gets no cost relief, and has no bespoke guidance or sector template, so the resilience half is the part that slips.
- It is a real accounting number. Disclose resilience spending where your vulnerable assets sit (B65(b)) and reconcile it to your financial statements (B65(e)).
1. The one line that does three jobs
IFRS S2 asks every reporter to disclose seven cross-industry metrics in paragraph 29. One of them, paragraph 29(e), is capital deployment. Here is the whole of it:
capital deployment: the amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities;
In plain terms: report how much money you have put toward climate-related risks and opportunities. Capital expenditure, or capex, is spending on long-lived assets, the kind that shows up on the balance sheet rather than as a running cost.
That single clause quietly does three separate jobs. Money can be deployed toward physical resilience, meaning spending that protects your assets from climate hazards. It can be deployed toward the low-carbon transition, meaning spending that cuts emissions. And it can be deployed toward opportunity, meaning spending that builds new low-carbon products or lines of business. The phrase “climate-related risks” in that clause covers physical risk explicitly. IFRS S2 defines physical risk as both acute events, such as storms, floods, drought and heatwaves, and chronic shifts, such as rising temperatures and changing rainfall over time.
Here is the problem this piece is about. With one line to go on, many reporters read 29(e) as their green capex number, the spending on renewables and efficiency, and stop there. The physical-resilience half, the money spent hardening and defending assets against hazards, goes undisclosed. This guide stays on that physical-resilience half. The transition and opportunity halves live under the same clause and are their own topic.
| Purpose | What the capital funds | Covered in this guide? |
|---|---|---|
| Physical resilience | Flood defences, storm-resistant materials, cooling for extreme heat | Yes, the focus here |
| Low-carbon transition | Renewables and efficiency that cut emissions | Carved out |
| Climate opportunity | New low-carbon products or lines of business | Carved out |
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2. Required everywhere, explained nowhere
Paragraph 29(e) applies to every reporter. What the standard does not do is tell you how to build the number, and it is worth seeing how little scaffolding there is.
It is one clause of text. There is no worked formula and no sector template behind it.
It does not get the cost relief the neighbouring metrics get. Paragraph 30, the relief clause, says that in preparing the metrics in paragraph 29(b) to (d), a reporter may use “all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort.” In plain terms: for the assets-at-risk metrics you get a do-your-best-with-what-you-reasonably-have allowance. That allowance stops at 29(d). It does not reach 29(e). The likely reason is simple: the capital you deployed is a number you already hold in your own accounts, so there is nothing to estimate.
Its only application guidance is generic. Paragraph 31 sends 29(e) to paragraphs B64 to B65, the appendix paragraphs that explain how to prepare the metric. But those paragraphs are shared across 29(b) through (g). None of the guidance is specific to capital deployment.
The reasoning behind the standard is silent on it too. The Basis for Conclusions, the document that records why the standard says what it says, notes only that the seven metric categories are drawn from earlier climate-reporting guidance. It gives no separate reasoning for capital deployment.
Even the sector guidance skips it. The Industry-based Guidance sets prescribed metrics for high-exposure sectors such as real estate and utilities. Those metrics measure physical-risk exposure, for example the floor area of properties sitting in a 100-year flood zone. None of them measures capital spent on resilience.
So the disclosure is mandatory at every level, and the method for building it is left entirely to the reporter. That gap is why practice diverges, and why the resilience half is the part that slips.
| Level of guidance | What it provides for paragraph 29(e) |
|---|---|
| Standard text | One clause; no worked formula, no sector template |
| Paragraph 30 cost relief | Excludes 29(e); the reasonable-and-supportable allowance stops at 29(d) |
| Paragraph 31, B64 to B65 | Generic guidance shared across 29(b) to (g); nothing specific to capital deployment |
| Basis for Conclusions | No separate reasoning; the metric is inherited from earlier climate guidance |
| Industry-based Guidance | Prescribes physical-risk exposure metrics only; none measure resilience capital |
3. What resilience spending actually looks like
A leading audit firm’s worked example makes the physical-resilience half concrete. It shows a reporter climate-proofing its properties through flood defences, storm-resistant materials, and cooling systems for extreme heat. It extends to redesign, and in some cases to relocating or decommissioning assets that face persistent, unavoidable exposure. Every one of those is capital deployed toward a physical-risk response.
That is what separates this half from the rest of 29(e). Spending on solar panels or energy-efficient systems is transition spending: it cuts emissions. Spending on flood defences is resilience spending: it protects an asset from a hazard. Both can sit under 29(e), but they answer different questions, and a reader cannot tell them apart unless you separate them.
One boundary worth stating. Buying reinsurance or insurance is not capital deployment. It transfers risk to someone else rather than deploying capital expenditure, financing or investment, so it sits outside the 29(e) number, even though it is a real climate response you may describe elsewhere.
4. How to build the number
The application guidance that governs 29(e), paragraphs B64 to B65, gives two moves that make the resilience number defensible.
The first is location. B65(b) tells you to consider where in your business your climate risks are concentrated, pointing to the same question as the assets-at-risk metric: which geographical areas, facilities and types of assets. In plain terms: disclose your resilience spending where your vulnerable assets sit, so the money lines up with the exposure it responds to. Knowing where those vulnerable assets sit is itself an analysis: platforms such as Continuuiti produce a forward-looking, asset-by-asset view of hazard exposure across climate scenarios, which points resilience capital toward the assets that need it. The figure itself stays yours, since 29(e) is your own capital expenditure reconciled to your financial statements. That hazard analysis is costed today for flooding, while hazards like wind, wildfire and drought can be flagged but are not yet costed the same way, and it uses a single-model scenario approach.
The second is reconciliation. B65(e) tells you to connect the metric to your financial statements, so that “the carrying amount of assets used is consistent with amounts included in the financial statements.” Carrying amount is the value an asset is recorded at in the accounts. In plain terms: 29(e) is a real accounting number, not a narrative estimate. An assurance provider, the independent firm that checks your disclosure, should be able to trace the figure back to the capex and investment already in your books.
One note on timing. The clause says capital “deployed,” which reads as money already spent. In practice, the leading worked example presents both spent and planned capital, out to a future year such as 2030, under the 29(e) tag. Treat forward-looking capital as observed practice rather than a requirement the text spells out, and be clear in your disclosure about which figures are spent and which are planned.
| Move | What it means | Source |
|---|---|---|
| Location | Disclose resilience spending where your vulnerable assets sit, so the money lines up with the exposure | B65(b) |
| Reconciliation | Tie the figure to the capex and investment already in your financial statements | B65(e) |
| Timing | Text asks for capital “deployed” (spent); practice often pairs it with planned capex, clearly labelled | Para 29(e); observed practice |
5. Where it connects to the rest of the disclosure
Capital deployment does not stand alone. The resilience assessment you run for paragraph 22, the scenario-based look at how well your business holds up under different climate futures, is what tells you where hardening is needed. Paragraph 29(e) is where you report the capital that funded it. The two are best written together, not in separate silos.
For a reporter with material physical exposure, the resilience-spending half of 29(e) is where you show you are managing the risk, not just measuring it. The assets-at-risk metric in 29(c) tells a reader how exposed you are. The capital-deployment metric in 29(e) tells them what you are doing about it. Leaving the second half blank tells them nothing.
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6. Sources
IFRS S2 Climate-related Disclosures (issued June 2023): paragraph 29 (cross-industry metrics, including capital deployment at 29(e)), paragraph 30 (reasonable and supportable information, limited to 29(b) to (d)), paragraph 31 and Appendix B paragraphs B64 to B65 (application guidance for 29(b) to (g)), paragraph 13 (concentrations of climate-related risks), paragraph 22 (climate resilience assessment), and the Appendix A definitions of acute and chronic physical risk. IFRS S2 Basis for Conclusions (paragraph BC75, the derivation of the seven cross-industry metric categories). IFRS S2 Industry-based Guidance on Implementing IFRS S2 (real estate, electric utilities, gas utilities, water utilities and insurance volumes, reviewed for capital-deployment metrics). KPMG Illustrative disclosures: Guide to sustainability reporting, IFRS Sustainability Disclosure Standards (October 2025), worked capital-deployment example tagged to IFRS S2.29(e).
Worked Samples
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A full worked disclosure, paragraph by paragraph, including how the capital-deployment metric in paragraph 29(e) sits next to the assets-at-risk numbers. The clearest way to see what a resilience figure looks like in place.
Frequently asked questions
What is IFRS S2 paragraph 29(e)?
Paragraph 29(e) is the capital deployment metric, one of the seven cross-industry metrics IFRS S2 requires every reporter to disclose. It asks for the amount of capital expenditure, financing or investment deployed toward climate-related risks and opportunities. That single clause covers three kinds of spending: physical resilience, low-carbon transition, and climate opportunity.
Does IFRS S2 capital deployment include climate adaptation spending?
Yes. The physical-resilience half of 29(e) is exactly that: capital spent hardening and defending assets against climate hazards, such as flood defences, storm-resistant materials and cooling systems. It is distinct from transition spending, which cuts emissions, and a reader cannot tell the two apart unless you separate them.
Is IFRS S2 capital deployment an actual or a planned number?
The clause asks for capital deployed, which reads as money already spent. In practice, worked examples present both spent and planned capital out to a future year. Treat forward-looking capital as observed practice rather than a strict requirement, and be clear in your disclosure about which figures are spent and which are planned.
Does paragraph 29(e) get the reasonable-and-supportable information relief?
No. The paragraph 30 allowance to use reasonable and supportable information without undue cost or effort applies only to paragraphs 29(b) to 29(d). It does not reach 29(e). The likely reason is that the capital you deployed is a number you already hold in your own accounts, so there is nothing to estimate.
Does buying insurance or reinsurance count as capital deployment under 29(e)?
No. Buying insurance or reinsurance transfers risk to someone else rather than deploying capital expenditure, financing or investment, so it sits outside the 29(e) number. It is a real climate response you may describe elsewhere in your disclosure, but it is not part of the capital-deployment figure.
