Foreword

Since Fortescue issued its previous Climate Transition Plan the policy and regulatory environment has shifted decisively in favour of transition planning. In June 2025 the IFRS Foundation published implementation guidance that explains how entities should disclose transition plans when applying IFRS S2, integrating those plans into mainstream financial reporting rather than treating them as an optional add‑on. The United Kingdom is consulting on measures that would oblige large companies and regulated financial institutions to publish credible transition plans, while a recent legal opinion for ClientEarth concludes that under English Law transparent plans reduce, rather than increase, liability risk for directors.

Other jurisdictions are also moving quickly. In March 2025 the Sustainability Standards Board of Japan finalised standards that incorporate IFRS S1 and IFRS S2 in full, bringing transition plan disclosure into the Japanese securities regime. Australia now requires Group 1 entities to disclose transition plans for financial years beginning on or after 1 January 2025. Singapore Exchange Regulation is phasing in IFRS S2‑aligned climate reporting, requiring all issuers to begin reporting key IFRS S2 disclosures, including narrative on transition strategy, from financial year 2025 and moving towards full alignment in subsequent years, and Hong Kong’s new climate‑disclosure requirements, effective for periods commencing 1 January 2025, are based on IFRS S2 and will be phased in between 2025 and 2028. Canada’s prudential supervisor now expects every federally regulated bank and insurer to maintain a climate transition plan. In Switzerland large public‑interest companies must, from the 2025 reporting cycle, publish a transition plan aligned with the national net‑zero target. Collectively these measures confirm that credible transition plans are becoming the regulatory baseline rather than a voluntary extra.

These regulatory advances are eclipsed by an economic discontinuity comparable to the original Industrial Revolution, and a political discontinuity reminiscent of the inter‑war years, when populism, protectionism and geopolitical fragmentation reshaped the global order. Research by the McKinsey Global Institute estimates that generative artificial intelligence could add between 2.6 trillion and 4.4 trillion dollars to global GDP each year, reshaping labour markets and competitive advantage across every sector.  At the same time a resurgence of nationalist populism is altering policy choices and heightening geopolitical and trade uncertainty. Navigating this twin transformation will demand exceptional agility from both governments and business.

In turbulent conditions it is essential to distinguish enduring signals from short‑term noise. The structural drivers are unequivocal. The World Meteorological Organization has confirmed 2024 as the warmest year on record, with the global mean temperature about 1.55 °C above the pre‑industrial average. Renewable energy costs continue to fall, and electrification of heat, transport and industry is accelerating, underpinning an irreversible shift in the energy mix. Public concern for climate, nature and social resilience has not dissipated and financial institutions are increasingly pricing climate-related risks, highlighting the need for credible transition plans to ensure efficient access to capital markets and financial services. Claims that climate commitments by companies can be abandoned with impunity ignore these fundamentals. Companies that dilute their climate strategies will undermine their competitiveness as regulation, technology and capital markets move inexorably forward, as well as expose themselves to litigation and reputational risk.

Within this context credible transition planning, as part of corporate strategy, has become an essential management discipline. A credible plan will help companies navigate future risk, uncertainty, and opportunity. It links long‑term ambition to near‑term capital expenditure, sets testable assumptions for technology and policy, identifies critical dependencies and assigns clear accountability. Credible plans also provide the foundation for collaboration across value chains, because no organisation can decarbonise in isolation. The steel sector illustrates the point: meaningful reductions in iron‑ore value‑chain emissions require miners, mills, shippers and policymakers to align on new production routes and traded green metal standards.

Fortescue’s 2025 Climate Transition Plan engages directly with these realities. It aligns capital allocation with ambitious targets, embeds resilience through scenario analysis, and focuses engagement on the forums that matter most, from COP 30 in Belém to the International Maritime Organization. The plan demonstrates how a company can manage risk, seize opportunity and contribute tangibly to the global goal of limiting warming by treating its transition plan as core business strategy.