IFRS S2 and greenhouse gas emissions reporting: what Thai companies need to focus on now

1. Why GHG reporting is becoming central to corporate reporting

IFRS S2 places significant weight on GHG emissions because they are a key indicator of an entity’s exposure to transition risks, the policy, legal, technological and reputational implications of moving towards a low carbon economy. These risks affect an entity’s ability to generate cash flows and secure financing and therefore fall within the scope of climate related financial disclosures.  

Scope 3 emissions, those arising across the value chain, both upstream and downstream, are particularly important. For many sectors, these emissions represent the majority of climate exposure, even though they sit outside the entity’s direct operational control.  

2. Thailand’s implementation pathway: what we know so far  

The Thai SEC has already provided directional guidance for listed companies. The focus will begin with Scope 1 and Scope 2 emissions, with phased data collection and reporting starting with SET50 companies and later extending to SET100, remaining SET listed companies and the MAI. Once this foundation is in place, disclosure of Scope 3 emissions is expected to expand progressively.  

Even though small and medium sized enterprises are not currently in scope, TFAC encourages all entities in the supply chain to understand GHG measurement concepts, as larger companies will increasingly require data from business partners.  

3. GHG Protocol standards: the measurement backbone behind IFRS S2 

Two GHG Protocol standards form the basis for measurement under IFRS S2:  

• GHG Protocol Corporate Standard, covering Scope 1, Scope 2 and Scope 3  
• GHG Protocol Corporate Value Chain (Scope 3) Standard, specifying 15 categories of value chain emissions 

IFRS S2 sets out disclosure requirements; the GHG Protocol provides measurement guidance. Preparers will need to understand how the two interact, particularly when identifying which Scope 3 categories are material. 

4. Scope 3: broad expectations, but materiality matters 

A frequent question is whether entities can confine Scope 3 reporting to a small subset of categories. Under IFRS S2, this is not permitted. Entities must consider all 15 Scope 3 categories and disclose those that are material to the entity’s climate related risks and opportunities. 

The message is not to disclose everything indiscriminately, but to apply: 

• a full value chain perspective 
• a thoughtful assessment of materiality 
• reasonable and supportable data, obtained without undue cost or effort 

The SEC is expected to develop local guidance by industry sector, which may help preparers prioritise categories most relevant to their business model. 

5. Data availability and proportionality: practical flexibility, not an escape clause 

IFRS S1 introduces the concept of information being “reasonable and supportable” and available without “undue cost or effort”. This is not intended to reduce ambition; it is intended to ensure proportional, credible reporting. Preparers are expected to: 

• use the most reliable data available 
• apply estimation techniques when data gaps occur 
• update and refine methods over time  

Where value chain partners have different reporting cycles, IFRS S2 allows use of the most recent available data, supported by appropriate disclosure and explanation of any significant intervening events. 

6. Financial institutions and financed emissions 

For banks and other financing entities, measuring financed emissions remains one of the most challenging areas. IFRS S2 does not prescribe a specific methodology for these calculations, including treatment of undrawn loan commitments. Instead, entities must apply the GHG Protocol and relevant Scope 3 guidance to develop methodologies appropriate to their lending and investment portfolios. This area is evolving and will require early planning, consultation with industry groups and close monitoring of regulator expectations. 

7. Targets, net emissions and the role of carbon credits 

Although IFRS S2 does not require entities to set climate related targets, any existing targets, whether mandated or voluntary, must be disclosed. This includes: 

• the scope of the target (Scopes 1, 2 and / or 3) 
• whether the target is gross or net • methodologies and assumptions used 
• progress against the target 

Where net targets rely on carbon credits, entities must separately disclose the gross emissions figure and provide clear information on the type, quality and underlying assumptions behind those credits. This ensures transparency around “permanence” and “additionality”, which are critical considerations in assessing the credibility of offset strategies.  

8. Group changes and comparative information  

IFRS S2 does not require restatement of comparative emissions when a group acquires or disposes of a subsidiary. However, disclosures must continue to align with the definition of the reporting entity in IFRS S1, consistent with the boundary used for financial statements. Preparers should be ready to provide additional narrative explanations when structural changes affect year on year comparability.  

9. Practical steps for Thai preparers 

Based on TFAC’s guidance, Thai entities may consider focusing on: 

• Mapping SEC requirements against their reporting calendar 
• Identifying priority Scope 3 categories relevant to their sector  
• Engaging suppliers and customers early to improve data quality  
• Reviewing internal systems to capture GHG data more consistently  
• Assessing current climate related targets, if any, for disclosure readiness  
• Strengthening internal governance, including audit committee oversight, ahead of mandatory reporting  

Conclusion 

Climate related reporting under IFRS S2 will represent a significant shift in disclosure expectations for Thai companies, particularly as the SEC’s climate first approach is rolled out. TFAC’s February 2026 guidance provides helpful clarity, but preparers should view it as a starting point rather than a checklist. Early planning, cross functional coordination and a strong understanding of GHG measurement principles will be key to meeting future expectations with confidence.  

References (in Thai):  

• TFAC’s article: IFRS S2 and GHG emissions reporting. Retrieved from The Federation of Accounting Professions.