The ISSB has rolled out amendments to the IFRS S2 for better GHG emissions reporting. The changes aim to simplify the process while maintaining critical investor information.
Key Points
•📅 Mark Your Calendar: Changes effective from 1 January 2027, early application allowed.
•📝 Feedback Driven: Amendments stem from ISSB’s consultation feedback.
•🔄 Flexibility Added: Alternative classification systems now permitted.
•📊 Jurisdictional Relief: New rules on global warming potential values and GHG Protocol Standard usage.
🛠️ The Nitty-Gritty
The International Sustainability Standards Board (ISSB) has issued targeted amendments to greenhouse gas (GHG) emissions disclosure requirements in IFRS S2 Climate-related Disclosures. These updates address specific challenges that companies faced while applying the Standard.
Based on feedback from the ISSB’s earlier consultation, these amendments offer much-needed clarifications and reliefs. The goal? To help companies implement the Standard smoothly while ensuring investors still get the critical data they need. And don't worry, it won't disrupt jurisdictions already adopting or using ISSB Standards.
🔄 Timeline & Early Adoption
The amendments are set to kick in for reporting periods starting on or after 1 January 2027. But if you're eager to get ahead, early application is totally on the table.
Moreover, the ISSB has also aligned financed emissions metrics in three SASB Standards with the updated requirements in IFRS S2. Talk about keeping everything in sync!
🔍 What Did They Change?
So, what's new? Here's a quick rundown:
Clarified that Scope 3 Category 15 GHG emissions can be limited to financed emissions as per IFRS S2.
Companies can now use classification systems other than the Global Industry Classification Standard to break down financed emissions data.
Jurisdictional relief from using the GHG Protocol Standard is available if only part of the entity needs a different measurement method.
New relief from using global warming potential values from the latest IPCC Assessment Report for converting GHG emissions.
ISSB Vice-Chair Sue Lloyd summed it up: > "Our priority in delivering targeted amendments to IFRS S2 GHG emissions disclosure requirements has been to provide a timely response to challenges. We are confident that the amendments will bring real relief to companies applying ISSB Standards without significantly affecting the decision-usefulness of information for investors."
