IFRS S2 Paragraph 29(c): The Four Questions Hidden in One Sentence

Paragraph 29(c) of IFRS S2 requires entities to disclose the amount and percentage of assets or business activities vulnerable to climate-related physical risks. The sentence is one line. The standard does not define what “amount” means, what denominator the percentage uses, what makes an asset “vulnerable”, or which set of assets the disclosure should cover. Each of those four undefined terms hides a definitional question. This piece works through all four.

The Four Questions at a Glance

#	Question	What it asks	Defensible answer anchor	Standard cite
1	Amount of what	Which valuation metric (carrying / fair / replacement / notional)	Carrying value, reconciled to financial statements	B65(e)
2	Percentage of what denominator	Which total (group assets / sub-portfolio / sector-relevant)	Sub-portfolio denominator with rationale stated	IG1 (illustrative)
3	Vulnerable under what	Which scenario / horizon / hazard / threshold	Diverse scenarios + 3 horizons + hazard-specific quantitative thresholds	Para 22 + B11 + B17
4	Assets in what scope	Own ops / lending book / investment portfolio / value chain	Sector-natural scope + named exclusions	B65(b) + Para 13

Citation key: “Para” = main standard paragraphs (1-37, operative); “B” = Appendix B (Application Guidance, paragraphs B1-B70); “IG” = Accompanying Guidance (illustrative, non-binding); “BC” = Basis for Conclusions (drafter rationale).

The Sentence and the Four Questions Hidden in It

Paragraph 29(c) of IFRS S1 and S2 reads, in full:

“climate-related physical risks: the amount and percentage of assets or business activities vulnerable to climate-related physical risks;”

IFRS S2, paragraph 29(c)

A sustainability lead reading this once will conclude that the standard wants a number and a percentage. A sustainability lead reading it twice, with an auditor on the line, will see what is actually being asked. The sentence hands the preparer four definitional questions and answers none of them.

1. Amount of what. Carrying value at amortised cost? Gross book value? Fair value? Replacement cost? Exposure-at-default? Insured value? Notional?
2. Percentage of what denominator. Of total assets? Of total exposure within a sub-portfolio? Of a sector-relevant denominator?
3. Vulnerable under what. Which scenario? Which time horizon? Which hazard set? What threshold makes an asset “vulnerable” rather than merely “exposed”?
4. Assets in what scope. Own operations only? Lending book? Investment portfolio? Insured book? Value chain? The consolidated group, or something narrower?

This piece does the work of making each of those four questions explicit, walking through what the standard says (and does not say), and listing the defensible positions that the first wave of IFRS S2 reporters have actually taken.

The educational claim is simple. After reading this, a practitioner can articulate the four ambiguities and pick a defensible position on each. Not a perfect position. A defensible one.

Where Paragraph 29(c) Sits in the Standard

Paragraph 29(c) is one of the seven cross-industry metric categories in paragraph 29. The category text is one short sentence. The architecture around that sentence is what makes it interpretable.

Two other categories carry the same grammatical structure: 29(b) (transition risks) and 29(d) (climate-related opportunities). All three say amount and percentage of assets or business activities with no definitional follow-up. Paragraph 29(e) (capital deployment) reads differently and is out of scope here. The Basis for Conclusions (BC) explains why. The seven cross-industry categories are derived from the TCFD’s Guidance on Metrics, Targets and Transition Plans (BC75). The descriptions are “in most cases intentionally non-specific to enable an entity to identify appropriate metrics” (BC77). The drafters chose ambiguity to allow measurement methodologies to evolve. This is a load-bearing quote and the entire piece pivots on it. The standard is not silent because it forgot. It is silent because it intends to be.

Three nearby paragraphs constrain that silence.

Paragraph 30. “In preparing disclosures to meet the requirements in paragraph 29(b)–(d), an entity shall use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort.” This is the proportionality clause. It bounds the judgement; it does not eliminate it (BC132). The same language appears at Paragraph 11 (risk identification) and Paragraph 18 (anticipated financial effects). The clause is a standing standard, not a Paragraph-30-only carve-out.

Paragraph 31. Cross-references Appendix B paragraphs B64-B65 for Paragraph 29(b)-(g) disclosures. B64 confirms the requirement applies in addition to GHG. B65 lists five considerations. The fifth, B65(e), is the closest the standard comes to a bright-line answer to Question 1: “an entity would consider whether the carrying amount of assets used is consistent with amounts included in the financial statements.” Carrying amount linked to the financial statements is the implicit baseline. Most early reporters do not cite B65(e), but the linkage is in the application guidance.

Paragraph 32. Industry-based metrics. Refers the entity to the Industry-based Guidance on Implementing IFRS S2 for sector-specific metric overlays. For physical-risk-relevant disclosures, this is where the FN-IN-450a.1 (Probable Maximum Loss for insurers), IF-RE-450a.1 (real estate floor area in 100-year flood zones), FN-MF-450a.1 (mortgage loans in 100-year flood zones) rows live.

The ISSB Accompanying Guidance, IG1, lists illustrative metrics for Paragraph 29(c): proportion of property, infrastructure or other alternative asset portfolios in areas subject to flooding, heat stress or water stress; number and value of mortgage loans in 100-year flood zones; wastewater treatment capacity located in 100-year flood zones; revenue associated with water withdrawn and consumed in regions of high or extremely high baseline water stress (IFRS S2 Accompanying Guidance, IG1). The units are different in each row: a proportion, a number-and-value pair, a capacity, a revenue. The Illustrative Guidance is non-binding (BC78). It shows variety; it does not impose hierarchy.

This is the architecture. The four questions live inside it.

Question 1: Amount of What

The standard text gives one word, “amount”, and walks away. (See the full Para 29(c) standard text for the verbatim language.) BC77 confirms the silence is intentional. IG1’s examples span revenue, mortgage value, wastewater capacity, and proportion of asset count. KPMG’s Illustrative Disclosures 2025 (Example 27) presents Paragraph 29(b)/29(c) using a world map, sector tiles, and an asset list with planned capex. The KPMG checklist’s row for Paragraph 29(c) restates the standard verbatim and offers no methodological prescription.

The closest the standard comes to a bright line is B65(e): the carrying amount of assets used in the disclosure should be consistent with amounts in the financial statements. This is not a requirement that the unit be carrying amount. It is a requirement that, if the entity uses a metric tied to assets, the metric should reconcile to the entity’s accounts.

This pushes preparers toward sector-natural choices.

Banking lending books. Carrying amount of loans at amortised cost, disaggregated by sub-portfolio (residential mortgage, CRE, project finance), is the natural unit. (See our worked banking Para 29(c) example for a defensible disclosure form.) It reconciles to the consolidated balance sheet under IFRS 9 and connects to the FN-MF-450a.1 IBG metric for mortgage loans in flood zones. Bank of America’s 2025 ISSB IFRS S2 Disclosure does not present a Paragraph 29(c) carrying-amount-vulnerable number; it shows a sector concentration table sourced from the Form 10-K that groups physical and transition risks together and does not satisfy Paragraph 29(c) standalone (page 14). The unit problem in banking is not the absence of a sensible answer, it is reporters not yet anchoring their disclosure on it.

Real estate. Carrying amount of investment property, with the IFRS 9 / IFRS 13 measurement basis disclosed. The IBG IF-RE-450a.1 metric uses floor area, not value; defensible practice discloses both, because they answer different investor questions (concentration of value versus concentration of footprint).

Mining and metals. Carrying amount of property, plant and equipment net of accumulated depreciation, disaggregated by site type (open-pit, processing plant, tailings storage facility, infrastructure). Tailings deserve their own line because post-closure liability extends beyond operating life and the carrying-amount measure misses that horizon. Rio Tinto’s 2025 Climate Action Plan presents site-level physical-risk discussion but does not consolidate to a single Paragraph 29(c) carrying-amount-vulnerable figure.

Insurance. The one sector where carrying amount alone is insufficient. An insurer’s biggest physical-risk exposure is its underwriting book, and the book’s carrying amount on the balance sheet (deferred acquisition costs, unearned premium liability) does not represent the climate-vulnerable activity. Defensible disclosure has three lenses. Probable Maximum Loss triangulation per FN-IN-450a.1 (gross and net of reinsurance, by return period) for the underwriting business activity. Carrying amount of the investment portfolio for the asset side. Carrying amount of operational property, plant and equipment for own operations. Insurance Australia Group’s FY25 Annual Report and the third edition of Severe Weather in a Changing Climate together document the underwriting-side method most fully. Excluding any of the three lenses is a reportable scope limitation.

The pattern: the choice of unit is defensible if disclosed and reconciled to the financial statements, indefensible if implicit. The common failure is not picking the wrong unit, it is not naming the unit at all.

Question 2: Percentage of What Denominator

The standard requires “the amount and percentage.” The percentage requires a denominator. The denominator is undefined.

The first agent reading IG1 will see that the examples use different denominators: percentage of a property portfolio, percentage of real assets, percentage of revenue from water-stressed regions. The denominators are not interchangeable. A portfolio denominator and a balance-sheet denominator give different numbers, and a sustainability lead defending the disclosure to an auditor must defend the choice.

The defensible positions follow from Question 1, because the natural denominator is the unit used for the numerator.

Banking discloses percentage of total lending exposure within the sub-portfolio. A residential-mortgage book of CU 200bn with CU 9bn in 1-in-100-year flood zones is 4.5%. A CRE book and a project-finance book each get their own ratio. A consolidated-group denominator (total assets) hides too much.

Real estate discloses percentage of total operating-portfolio carrying amount. Property-sector disaggregation (office, industrial, retail, multi-family) is best practice because the hazard-sensitivity differs across sectors.

Mining discloses percentage of total property, plant and equipment carrying amount, with a secondary disclosure of percentage of production at risk. Production share is sector-relevant and recovers information that PPE share understates: a single open-pit mine can carry 22% of group production with 6% of group PPE.

Insurance has three denominators because it has three lenses. Underwriting absolute (no denominator, because the relevant pool of “exposure” is the gross written premium, and a PML over GWP ratio is hard to interpret without context). Investment portfolio percentage of assets under management. Operational PPE percentage of carrying amount.

What the standard does not require, but best practice should, is disclosure of why the chosen denominator was chosen. Most early reporters omit the rationale. A line of explanation moves the disclosure from defensible-implicit to defensible-explicit. The cohort reviews flag denominator silence as one driver of the “high variability” they observe (KPMG FAST 30 commentary; PwC AASB S2 review of 22 first-wave reporters; Deloitte Wave 1 review).

Question 3: Vulnerable Under What Scenario, Horizon, Hazard, Threshold

This is the largest definitional gap and the largest variance in cohort practice. The word “vulnerable” in Paragraph 29(c) carries four sub-questions. The standard answers none of them directly, but the application guidance and the Strategy section answer most of them indirectly.

Scenario. Paragraph 29(c) does not specify scenarios. Paragraph 22 scenario analysis requires the entity to use “climate-related scenario analysis to assess its climate resilience” and Paragraph 22(b)(i)(2) requires disclosure of “whether the analysis included a diverse range of climate-related scenarios.” B11-B12 confirm that scenarios from authoritative sources (NGFS, IPCC SSPs, IEA) are “considered to be available to the entity without undue cost or effort” (Appendix B, B11). B12 requires a “reasonable and supportable basis” for scenario choice. The implication is direct: a defensible Paragraph 29(c) disclosure uses at least the scenario set that satisfies Paragraph 22 (a diverse range, ideally bracketed: a 1.5°C / 2°C orderly scenario plus a high-warming scenario, or NGFS Orderly + Disorderly + Hot House, or SSP1-2.6 + SSP2-4.5 + SSP5-8.5). A single-scenario disclosure that calls itself compliant is exposed.

Time horizon. Paragraph 10(c) requires the entity to specify, for each climate-related risk, “over which time horizons (short, medium or long term) the effects of each climate-related risk and opportunity could reasonably be expected to occur.” Paragraph 10(d) requires the entity to define those three horizons and link them to its strategic-planning cycle. BC41 confirms the horizons are entity-specific by design. Most early reporters anchor on 2030 / 2040 / 2050 for medium / long-term assessments. B10 adds a useful constraint: “As the time horizon increases and the availability of detailed information decreases, the degree of judgement required increases.” The defensible Paragraph 29(c) disclosure presents the vulnerability number across all three horizons with the horizon definitions stated explicitly.

Hazard set. The standard’s Appendix A defines climate-related physical risks as “acute (storms, floods, drought, heatwaves) and chronic (precipitation/temperature pattern shifts, sea level rise, water availability loss, biodiversity loss, soil productivity changes).” It does not require the entity to assess all of them. It requires the entity to assess those material to its business. The IBG sector volumes specify expected hazards by industry: insurance gets the seven-peril SWICC taxonomy under FN-IN; real estate gets flood, heat, water stress under IF-RE; mining gets water stress, heat, drought, flood under EM-MM. Defensible practice discloses the full hazard list considered and the methodology for narrowing to the material subset.

Threshold. The most contested sub-question. IG1 references “100-year flood zones” and “regions of high or extremely high baseline water stress” as illustrative thresholds. Neither is mandatory. A defensible Paragraph 29(c) disclosure picks hazard-specific quantitative thresholds and discloses them: an asset is “vulnerable” to flood if it falls within the 1-in-100-year zone under SSP5-8.5 by 2050; “vulnerable” to extreme heat if it experiences ≥10 days/year above 35°C; “vulnerable” to water stress if it draws on a basin in the WRI Aqueduct extremely-high category. Indefensible: the word “vulnerable” used in the disclosure without a threshold attached.

B17 carries an implication that auditors will read closely. Entities with high exposure to climate-related risks and the skills, capabilities or resources are “required to apply a more advanced quantitative approach to climate-related scenario analysis.” Proportionality is not a permission slip for under-specification when the entity has the means.

Continuuiti note: B17 is where automated platforms shift the calculus on the proportionality defense. Continuuiti’s climate risk methodology provides the SSP/RCP scenario set across 12 hazards × 4 time horizons (baseline, 2030, 2040, 2050) with hazard-specific quantitative thresholds (flood return period, days-above-threshold heat, WRI Aqueduct water stress). This is the data layer that lets a reporter satisfy B17 without an in-house climate-science team. The same data feeds the asset-level inputs that the four definitional questions of Paragraph 29(c) all converge on.

The first-wave cohort reviews independently flag Question 3 as the most under-specified component of Paragraph 29(c) (KPMG FAST 30; NZ FMA / SLR Consulting 2024; PwC 22-reporter review; Deloitte Wave 1). The detail belongs in the proportionality section below.

The TCFD-derived 11 disclosures map cleanly to Paragraph 22 scenario analysis requirements; reporters transitioning from TCFD inherit the scenario discipline but should not assume the threshold-disclosure expectations under IFRS S2 are equivalent.

Question 4: Assets in What Scope

The phrase “assets or business activities” is broad. Paragraph 29(a), the GHG paragraph, scopes itself explicitly to the consolidated group plus investee disaggregation, with separate financed-emissions sub-disclosures for asset management, commercial banking and insurance (Paragraphs B58-B63). Paragraph 29(c) is silent on the equivalent question. The implicit answer is in B65(e) (consistency with the financial statements) and B65(b) (concentration in the entity’s business model and value chain, cross-referenced to Paragraph 13).

The defensible scopes vary by sector.

Banking. The lending book is the load-bearing scope. Own operations are typically immaterial relative to the financed activities. Some leading reporters disclose both, but the lending book is the disclosure that drives the number. Within the lending book, sub-portfolio disaggregation is necessary because the hazard-sensitivity differs across mortgage, CRE, and project finance. The investment-banking trading book is typically out of scope for Paragraph 29(c) because the assets are intermediated and short-tenor.

Real estate. The operating portfolio. Development pipeline disclosed separately because the asset is not yet on the balance sheet at the reporting date. Land held for sale typically excluded.

Mining. Operating sites including tailings storage facilities, regardless of life-cycle stage. The post-closure liability horizon is the reason: a tailings facility past commissioning but pre-closure may not appear material in carrying amount terms but represents a tail-risk exposure on a horizon longer than the operating life. Supply chain (logistics, port handling, downstream processing) typically excluded; this is a known gap and worth flagging in the disclosure.

Insurance. Three lenses, as established under Question 1. Underwriting business activity (per FN-IN-450a.1), investment portfolio, operational PP&E. Excluding any of the three is a reportable scope limitation. The Insurance Australia Group disclosures document all three; the cohort pattern across other first-wave general insurers is to disclose qualitatively only.

The cross-sector gap is value-chain physical-risk exposure. Suppliers, customers, distribution networks. Quantified almost nowhere. Defensible practice discloses the scope explicitly and notes what is excluded and why. ESRS E1-9 differs on this question, requiring a “before adaptation actions” presentation and broader value-chain expectations. Multi-regime reporters should not treat IFRS S2 and ESRS E1-9 as interchangeable on this paragraph.

Sector-Natural Defensible Positions

Sector	Numerator unit	Natural denominator	Scope	Source-pile evidence
Banking	Carrying amount of loans (amortised cost)	Sub-portfolio total exposure	Lending book; own ops typically immaterial	Bank of America 2025 ISSB Disclosure
Real Estate	Carrying amount of investment property	Operating portfolio carrying amount	Operating portfolio; pipeline disclosed separately	IF-RE-450a.1
Mining	Carrying amount of PP&E (net depreciation)	Group PP&E + secondary share-of-production	Operating sites incl. tailings facilities	Rio Tinto 2025 Climate Action Plan
Insurance	Three lenses: PML / investment carrying amount / operational PP&E	GWP-relative + AUM-relative + carrying-amount	Underwriting + investment + own ops	IAG 2025 + IAG SWICC 3rd ed.

What the Proportionality Clause Does Not Mean

Paragraph 30, “all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort,” is the proportionality clause. The same language appears at Paragraphs 11 and 18, applied to risk identification and to anticipated-financial-effects disclosure. BC132 clarifies what the clause does and does not authorise: undue cost or effort is not required to obtain the information, but the entity is “prohibited from overstating or understating” the disclosure.

Roughly one-third to one-half of first-wave reporters either omitted Paragraph 29(c) outright or substituted qualitative narrative. KPMG, PwC, Deloitte, and the NZ FMA / SLR Consulting review all converge on this finding. Bank of America’s 2025 ISSB IFRS S2 Disclosure cites the proportionality relief explicitly: “Based on current capabilities and resources, we have determined the level of measurement uncertainty involved in estimating quantitative information about the financial effects and priority of identified climate-related risks is so high that it would not be useful… This approach is consistent with the relief provided under IFRS S2 and helps drive disclosures that remain decision-useful while proportionate to the Corporation’s circumstances” (Bank of America ISSB IFRS S2 Disclosure 2025, p 11). CLP Group’s Content Index, the only known public paragraph-by-paragraph IFRS S2 mapping, shows “Nil” entries for the 2023 Annual Report against Paragraphs 29(b), 29(c), 29(d), 29(e), pointing instead to a separate Climate Vision 2050 appendix and committing in the remarks column to “review methodologies and processes that would help to enhance” the disclosure in future reports (CLP Group 2023 IFRS S2 Content Index, p 9).

These are honest disclosures. They are also the leading edge of a narrowing tolerance. Big-4 commentary across the four cohort reviews flags Paragraph 29(c) as the universal weak point, not isolated reporter failures. Reporters who lean on the proportionality clause now are deferring work that auditors will require in years two and three. B17 of the standard, the requirement that entities with high exposure and the skills apply a more advanced quantitative approach, is the lever auditors will pull. The empirical companion to this interpretive piece is now live: Six first-wave IFRS S2 disclosures: what they skipped. It applies the four-question framework above to six named first-wave reporters with verbatim Para 22 + Para 29(c) extraction and a four-tier classification of disclosure quality. A construction-guide companion is also live for the 8 industries where the standard hands the threshold and unit through Industry-based Guidance: IFRS S2: 8 industries with prescribed physical-risk metrics.

For the practitioner, three things the proportionality clause does not mean:

1. It does not mean qualitative-only disclosure when quantification is feasible. If the entity has flood-zone data and a property register, “we cannot quantify under undue cost” is not defensible.
2. It does not mean omitting the scenario, horizon, and hazard discussion in favour of a single line citing the relief. The relief applies to the quantitative disclosure; the methodology disclosure stands.
3. It does not mean choosing the easiest sub-portfolio (own operations) and ignoring the rest (lending book, investment portfolio, insured book). Selective scope without disclosing the limitation is the version of proportionality the standard prohibits under BC132.

AASB S2 inherits Paragraph 29(c) verbatim; the same proportionality limits apply in the Australian regime.

The Picking-Positions Checklist

Before the disclosure goes to the auditor, run the four questions one more time.

1. Amount of what. Carrying amount of [stated assets] reconciled to the [stated balance-sheet line]. Cross-reference to the financial statements per B65(e). Stated, not implicit.
2. Percentage of what denominator. Percentage of [stated denominator]. Rationale stated. Sub-portfolio disaggregation where the hazard-sensitivity varies.
3. Vulnerable under what. Scenario set (minimum a diverse range per Paragraph 22(b)(i)(2)). Time horizons (all three short / medium / long per Paragraph 10(c), defined per Paragraph 10(d)). Hazard set (acute and chronic, material subset narrated). Threshold (hazard-specific quantitative threshold disclosed for each).
4. Assets in what scope. Scope stated. What is excluded and why is stated. ESRS E1-9 divergence flagged if the entity is multi-regime.

Paragraph 29(c) is a risk-quantification disclosure inside a sustainability-disclosure standard. It is not a sustainability gesture. The four definitional choices have to stand up to a Big-4 reviewer, an internal-audit reviewer, and a portfolio-risk peer-review. They have to be defensible. They do not have to be perfect. The standard does not ask for perfection. It asks for choices that hold up under scrutiny, traceable to the data the entity has and the methodology it used, with the gaps named.

The cohort that nails Paragraph 29(c) in years two and three will be the cohort that picked positions in year one and disclosed them.

Sources

Standard, Basis for Conclusions, Accompanying Guidance

• IFRS S2 Climate-related Disclosures, June 2023 (with December 2025 amendments). Standard text via the IFRS S2 Standards Navigator. Paragraphs cited: 10(c), 10(d), 11, 13, 18, 22(b)(i)(2), 25, 29(a)-(g), 30, 31, 32. Appendix A definitions of climate-related physical risks. Appendix B paragraphs cited: B4, B6-B7, B8, B10, B11, B12, B14, B17, B18, B58-B63, B64, B65(b), B65(e).
• Basis for Conclusions on IFRS S2. BC paragraphs cited: BC41, BC73, BC75, BC77, BC78, BC131, BC132, BC133.
• Accompanying Guidance to IFRS S2. IG1 illustrative metrics table for Paragraphs 29(b)-(e).

Third-party interpretive material

• KPMG, Illustrative Disclosures: ISSB, October 2025. Example 27 cited as the canonical Paragraph 29(b)/29(c) format reference.
• KPMG, ISSB Disclosure Checklist, 2025. Paragraph 29(c) row.

Public disclosures (named, with page reference where applicable)

• Bank of America Corporation, ISSB IFRS S2 Disclosure 2025, December 2025. Page 11 (proportionality opt-out language). Page 14 (commercial-credit sector vulnerability table; cross-referenced to 2024 Form 10-K).
• CLP Group Holdings, 2023 IFRS S2 Content Index. Page 9 (Paragraphs 29(b)-(e) row), pages 5-7 (Paragraph 22 sub-items, Paragraph 25 sub-items showing extensive “Nil” entries).
• Insurance Australia Group, 2025 Annual Report. Sustainability Report sections.
• Insurance Australia Group, Severe Weather in a Changing Climate, 3rd edition, November 2025 (NCAR partnership).
• Rio Tinto, 2025 Climate Action Plan.

Cohort reviews

• KPMG Australia, AASB S2 First Impressions (FAST 30 dashboard tracker), Feb-Mar 2026.
• PwC Australia, AASB S2 Unpacked, review of 22 first-wave AU Group 1 reporters, February 2026.
• Deloitte Australia, Wave 1 Review of AU first-wave AASB S2 reporters, 2026.
• NZ FMA / SLR Consulting, NZ CRD First Statement Review, 2024.

Frequently Asked Questions

What does paragraph 29(c) of IFRS S2 require?

Paragraph 29(c) requires reporters to disclose the amount and percentage of assets or business activities vulnerable to climate-related physical risks. The standard is silent on four definitional choices: which valuation basis to use for the amount, which denominator anchors the percentage, what makes an asset ‘vulnerable’ (scenario, time horizon, hazard, threshold), and what scope of assets is in or out. The Basis for Conclusions (BC77) confirms the silence is intentional.

What ‘amount’ should companies disclose under IFRS S2 paragraph 29(c)?

Application paragraph B65(e) is the closest to a bright line: the carrying amount of assets in the disclosure should be consistent with amounts in the financial statements. Carrying value at amortised cost (banking lending books), carrying amount of investment property (real estate), and carrying amount of property, plant and equipment net of depreciation (mining) are sector-natural choices. Insurance is the exception, where three lenses are required because underwriting exposure is not represented by balance-sheet carrying amount.

How should companies define ‘vulnerable’ under IFRS S2 paragraph 29(c)?

Defensible practice answers four sub-questions explicitly: scenario set (a diverse range, including a high-warming variant per Para 22(b)(i)(2)), time horizon (short, medium, and long term per Para 10(c)), hazard set (acute and chronic, narrowed to the material subset), and threshold (hazard-specific quantitative cut-off, such as the 1-in-100-year flood zone or WRI Aqueduct extremely-high water stress). Application paragraph B17 sets a higher quantitative bar for entities with the skills, capabilities, or resources.

Does the proportionality clause let companies skip paragraph 29(c)?

No. Paragraph 30 permits ‘reasonable and supportable information available without undue cost or effort,’ but BC132 prohibits overstating or understating the disclosure. The clause permits estimation, not omission. Roughly one-third to one-half of first-wave reporters relied on the clause to skip 29(c) entirely or substitute qualitative narrative. Big-4 cohort reviews (KPMG FAST 30, PwC, Deloitte, NZ FMA) flag this as a narrowing tolerance: a Year-1 pattern that audit will not accept in Years 2-3.

This piece focuses exclusively on climate-related physical risk. For the transition-risk limb of paragraph 29(b) and the capital-deployment paragraph 29(e), see separate Continuuiti coverage.