The ISSB has published an Exposure Draft proposing targeted amendments to its IFRS S2 Climate-related Disclosures Standard, aimed at easing the application burden for companies reporting GHG emissions.
The draft, released in response to market feedback, includes several practical reliefs designed to clarify requirements without reducing the quality of information available to investors.
Key proposed changes include relief from measuring and disclosing Scope 3 Category 15 emissions related to derivatives and certain financial activities, as well as exemption from using the Global Industry Classification Standard (GICS) in specific cases for disaggregated financed emissions reporting.
The draft also provides clarification around jurisdictional alternatives to the Greenhouse Gas Protocol for emission measurements and permits the use of jurisdiction-mandated Global Warming Potential (GWP) values that differ from the most recent IPCC figures.
These proposals aim to reduce complexity and costs for preparers while maintaining consistency and alignment with the broader ISSB Standards. The Exposure Draft introduces optionality, enabling entities and jurisdictions to decide whether to apply the reliefs without affecting alignment with the global baseline of the Standards.
ISSB vice-chair Sue Lloyd said, “It is the role of a responsible standard-setter to listen to market feedback from the earliest implementation stages, and to support preparers in the application of our Standards. As a market-focused standard-setter, we have taken steps to respond in a timely manner by proposing targeted amendments helping preparers where possible, without causing too much disruption and ensuring that our Standards continue to enable the provision of decision-useful information to investors.”
She added, “Proposing these amendments to a relatively new Standard is not a decision that was taken lightly—we have carefully considered the need for such amendments and have sought to balance the needs of investors while considering cost-effectiveness for preparers. Our due process is fundamentally important to us. We always consult our stakeholders when proposing changes to our Standards and are balancing the need to respond to stakeholders’ needs on a timely basis with giving all interested parties the opportunity to participate in providing feedback by setting a 60-day comment period.”
The 60-day comment window on the Exposure Draft closes on 27 June 2025. The proposed amendments were shaped by insights from the Transition Implementation Group on IFRS S1 and IFRS S2, and ISSB’s ongoing dialogues with global jurisdictions during the adoption process.
Pending feedback, the ISSB intends to finalise these updates by the end of 2025. Meanwhile, companies applying the June 2023-issued IFRS S1 and S2 can continue to follow the existing framework, with jurisdictions encouraged to maintain alignment for global consistency and efficiency in reporting.
The ISSB also recently introduced a pivotal new tool designed to aid regulators and market participants in adopting its sustainability reporting standards across various jurisdictions.
The newly released Jurisdictional Roadmap Development Tool is a strategic resource intended to facilitate the adoption of the IFRS Sustainability Disclosure Standards, which include the general sustainability (IFRS S1) and climate (IFRS S2) reporting standards introduced in June 2023.
More than 35 jurisdictions have already begun integrating these standards, which are vital for investors needing detailed insights into sustainability risks and opportunities within companies.
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