ISSB trims and tunes IFRS S2 on financed emissions
As climate disclosure starts to move from board slides to real reporting, the International Sustainability Standards Board has gone back to IFRS S2 with a scalpel. Yesterday it issued targeted amendments to the greenhouse gas emissions requirements, aiming to ease some early application headaches without unpicking the overall architecture.
The changes give companies more room on some of the most contentious areas. Scope 3 Category 15 disclosures can be limited to financed emissions as defined in IFRS S2. Banks and insurers can use alternative industry classifications, not just GICS, to break down financed emissions. There is jurisdictional relief if parts of a group must use non GHG Protocol methods, and on the timing of adopting the latest IPCC global warming potential values. Matching amendments have been made to financed emissions metrics in three SASB Standards.
All of this reflects feedback from preparers and the ISSB’s Transition Implementation Group as jurisdictions gear up to adopt IFRS S1 and S2.
For digital reporting, the trick will be to capture these reliefs in the IFRS Sustainability Taxonomy without losing comparability. Optional routes can be helpful, but investors and supervisors still need to see who is using which path.
Readers can find the full package in the ISSB’s amendments to IFRS S2 and the related project materials. Read about it here.
