ISSB update January 2025 – Proposed amendments to IFRS S2

Scope 3 Category 15 GHG emissions 

Proposed amendments will: 

• permit exclusion of Scope 3 Category 15 GHG emissions associated with derivatives, facilitated emissions and insurance-associated emissions. The ISSB will propose: 
  • amendment to § 29(a)(i)(3) of IFRS S2 (disclosure of Scope 3 GHG emissions) to exclude specific GHG emissions as set out in the bullet point below, rather than an additional transition relief; 
  • limiting the scope of the relief for Scope 3 Category 15 GHG emissions by requiring an entity to disclose financed emissions as defined in IFRS S2 and not requiring an entity to measure and disclose GHG emissions associated with derivatives; 
  • requiring disclosure of the amount of derivatives and specific financial activities excluded from Scope 3 Category 15 GHG emissions as a result of this limitation in scope. (Note: only 8 of 14 ISSB members agreed with this proposal); 
  • requiring an explanation of the derivatives excluded arising from this change; 
• extend the jurisdictional relief to enable the use of locally determined Global Warming Potential (GWP) values instead of the ones from the latest Intergovernmental Panel on Climate Change (IPCC) assessment; 
• clarify the jurisdictional relief to enable the use of a method other than the GHG Protocol Corporate Standard. 

Use of the Global Industry Classification Standard (GICS) 

In response to challenges raised regarding implementation of GICS, the ISSB will propose amendments which will: 

• amend the requirement to use GICS when disaggregating specific financed emissions information. Entities would be required to use: 
  • GICS, if it is already used to classify its lending and investment activities; 
  • an alternative industry-classification system if required by a jurisdictional authority or exchange. If more than one system is use, emissions information would have to be disaggregated using an appropriate classification system; 
  • if none of the above, an industry-classification system of the entity’s own choice which provides useful information for users; 
• add a requirement to disclose the industry-classification system used and explain the basis for the selection (if a classification system other than GICS has been used)  

Next steps 

The ISSB is planning to issue an exposure draft in Q2 2025 on these proposals allowing a 60-day comment period. 

The International Sustainability Standards Board