What ISSB and TCFD Actually Mean for SME Boards

Estimated reading time: 4 minutes

Climate Reporting Isn’t Just for the FTSE100 Anymore

Over the past two years, climate-related reporting frameworks have evolved from voluntary guidance into regulatory expectation. For SMEs, especially those with complex estates, philanthropic investors, or public-facing brands, the shift from “should” to “must” is happening quietly — and fast.

So what do the ISSB and TCFD mean in practice? And how should SME boards respond?

First, let’s demystify the acronyms

• TCFD (Task Force on Climate-related Financial Disclosures) was developed by the Financial Stability Board and has been widely adopted as the gold standard for climate reporting. It outlines four key pillars:
  Governance, Strategy, Risk Management, and Metrics & Targets.

• ISSB (International Sustainability Standards Board) is the next evolution. It consolidates frameworks like TCFD into a global standard for climate and sustainability-related financial disclosures. The key release is IFRS S2, which builds directly on TCFD and is being adopted as a baseline by regulators worldwide.

What this means for SME Boards

1. You may not be regulated yet — but your funders and partners are
   Banks, insurers, grant-makers, and supply chain gatekeepers are now asking SMEs for their climate risk exposure, carbon footprint, and transition plan. If you’re not ready to answer, someone else will.

2. Governance is the new front line
   ISSB and TCFD both demand evidence that boards understand and oversee climate risks. It’s no longer enough to say “we’re working on it.” SME boards should formally embed climate in their risk registers and strategic planning cycles.

3. Scope 1, 2 and 3 emissions will become standard reporting practice
   You’ll need to identify (and in some cases, quantify) emissions from your own operations, purchased energy, and wider value chain. SMEs often assume this is too complex — but with the right support, it can be proportionate, practical, and insightful.

4. It’s not just risk — it’s opportunity
   Done well, this isn’t just a compliance exercise. It’s a lens to improve resilience, reduce operating costs, attract values-aligned investors, and future-proof the business.

What Boards Should Do Now

✅ Appoint a board-level lead for climate governance

✅ Commission a simple TCFD/ISSB-aligned climate risk scan

✅ Align your carbon strategy with your long-term business plan

✅ Seek support that balances regulatory knowledge with operational pragmatism

Need help cutting through the noise?

Resilient Horizons helps boards turn climate complexity into strategic clarity. Whether you need a health check, reporting framework, or just a second pair of eyes — let’s talk.