In recent years, growing concerns about the impact of climate change and other environmental risks on global financial stability have prompted investors and other stakeholders to demand more useful information regarding how the activities of economic entities affect the environment and climate, as well as the implications of climate change and other related risks for those entities’ operations and their ability to generate future cash flows. Accordingly, this study aims to investigate the effect of climate change disclosures in accordance with the Climate-Related Disclosures Standard (IFRS-S2) on the business model of Iraqi economic entities, focusing on the banking sector, using a sample of 30 banks listed on Iraq Stock Exchange from 2018 to 2023. The relationship between climate change disclosures and the business model was examined by reviewing the financial statements and published policies of these banks, in addition to developing key performance indicators (KPI) to assess the extent of business model integration of each bank’s and compare it to the average performance of the banking sector. Such a comparison facilitates a comprehensive evaluation of alignment with sector-wide practices within the study context. To measure the relationship between the study variables, the simple linear regression (SLR) was employed. The results shows that 3% of the variation in the business model is attributable to the banks’ adoption of climate change disclosure requirements. Meanwhile, the largest effect on the business model is attributed to the strategies adopted by the banks in line with IFRS-S2 requirements, specifically those incorporating climate-related risks and opportunities into their activities. By contrast, metrics and targets set under IFRS-S2 did not show any noteworthy impact on the business model, a finding attributed to the limited disclosure on the metrics and targets adopted by the sampled banks.